BusinessDay 20 Apr 2021

businessday market monitor FMDQ Close Benchmark NTB* & CP*

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Crude Oil $66.81

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FOREIGN EXCHANGE

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$-N 475.00 482.00 £-N 650.00 670.00 €-N 555.00 568.00

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NTB

April 15, 2021

Total Nigeria plc CP (Series 1)

Spot ($/N) 14-Oct-21 22-Jun-21

I&E FX Window 410.33 CBN Official Rate as at

0.09

379.00

1M Currency Futures 28-Apr-21 ($/N) 419.08

0.00

3.89

3.99

2M 26-May-21 420.58

3M 30-Jun-21 422.08

I

n a bid to attract more investment, Nigeria is renegotiating commercial contract terms in its proposed oil reform bill in a move it hopes will keep investment flowing into a sector crucial for its economy at a time spending is being slashed.

This development showed a shift by Africa’s largest oil producer, who is getting more concerned about growing competition from other Africa countries making exploration terms more attractive as they compete for a limited pool of capital. Lower oil prices and concerns about the future of fossil fuel because of climate change are curbing

the desire to invest by oil majors.

Some of the changes to Nigeria’s Petroleum Industry Bill (PIB) include the reduction of royalties for new production from deep water oil-fields to 5 percent from 7.5 percent and boosting the production level that triggers higher royalties from 15,000 barrels per day (bpd) to 50,000bpd, according

FGN

Dangote Cement plc

Axxela NSP-SPV Funding 1 (Natural Gas) PowerCorp plc plc

23-Jul-30 30-Apr-25 20-May-27 27-Feb-34 0.00

0.00

0.00

0.00

12.17

13.98

14.00

14.21

6M 12M 29-Sep-21 30-Mar-22 426.58

435.58

60M 36M 27-Mar-24 25- Mar-26 511.54

605.76

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

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In search of more money, Nigeria changes oil reform DIPO OLADEHINDE

Benchmark Sovereign & Corporate Bonds

to Reuters, who cited people close to drafting the bill and revealed a letter from interested oil companies.

It also involves the reduction of hydrocarbon tax to 30 percent for converted leases, down from 42.5 percent in its original bill plan, in a bid to attract more Continues on page 31

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Naira adjustment, end to subsidy to add N200bn to FAAC monthly ISAAC ANYAOGU

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djusting the conversion of dollar rate for oil proceeds to the naira and putting an end to fuel subsidies could add about N200 billion to monthly funds shared by the various tiers of government in Nigeria, analyContinues on page 31

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Buhari to work with Nigerien president to stabilise ECOWAS region Tony Ailemen, Abuja

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resident Muhammadu Buhari on Monday assured the newly inaugurated president of Republic of Niger, Mohamed Bazoum, of Nigeria’s willingness to work with the country to stabilise the West African region.

Buhari, while hosting the Nigerien president at the Presidential Villa, Abuja, said Nigeria would do everything to “stabilise our region for the benefit of the two countries”.

President Bazoum was in Nigeria on his first international visit.

Buhari identified Nigerians and Nigeriens as people with similar culture, language and ways of life.

“We also share about 1,500 kilometres of land border, so we cannot ignore each other,” he said.

The two countries have

also been at the receiving end of attacks from the dreaded Islamic State of West Africa (ISWAP) and Boko Haram that have led to the death and displacement of several of its citizens.

Ba z o u m re c e nt l y a ssumed office two days after surviving an attempted military coup after an election that led to the first-ever democratic changeover. He contested the presidential election under the platform of the ruling Party for Democracy and Socialism and was declared winner in the second round of voting held on Feb. 21, 2021.

His victory at the polls had been subject of bitter contest as his rival, Mahamane Ousmane, while rejecting the results, also called for public demonstrations.

“You have been in the system for a long time. The only thing is that you had never been president. Now you are one,” Buhari said.

He assured that Nigeria

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would assist Niger in diverse ways as required. On terrorism as perpetrated by Boko Haram, President Buhari observed that Republic of Niger also suffers high casualties. “We will do all it takes to secure our two countries,” he said.

President Buhari was thankful to the immediate past President Mahamadou Issoufou for what he calls “his understanding and sacrifices” to help stabilize the region, urging Bazoum to maintain the institutions his predecessor had established.

President Bazoum said he was delighted to make Nigeria his first port of call, noting that the two countries have common interests, “and, therefore, a good relationship is very important”.

On security, he observed that the fact that some Nigerians flee to Niger during terrorist attacks “shows that we need to cooperate, and we will face our challenges together”.

First Bank launches new corporate website

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irst Bank has announced the launch of its newly designed website at https:// www.firstbanknigeria.com/.

The new website is upgraded with features that are streamlined to reinforce its role in delivering seamless banking and technology solutions to its customers across the world.

The website is configured with modern design and improved functionality that eases customer experience whilst carrying out various activities on the site, including electronic

banking. Non-customers are also able to open an account, putting them at an edge in the industry as they establish a relationship with the bank that puts you, its customers, first.

According to the bank, the new website seamlessly adopts a fresh, magazine-style look and feel for easy navigation in order to promote access to essential information for its customers, FirstMonie agents, prospective agents and the public. This upgrade also guides one to make well-informed decisions about one’s personal, business, and private

financial needs.

Adesola Adeduntan, CEO of FirstBank Group, while speaking on the launch of the new corporate website, said that “as one of the key contact points to existing and potential customers, the bank’s website remains a gateway to our business, supporting our unique value propositions and financial services solutions. As such, we are committed to continuously improve the overall user experience through intriguing content quality, exciting features and ease of navigation’’.

PAC Holdings debunks report of liquidity crisis in Wema Bank

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anAfrican Capital (PAC) Holdings Limited has stated that recent media report to the effect that liquidity crisis had hit one of the nation’s oldest banks, Wema Bank did not in any way represent its position or emanated from it.

The media report, (not in BusinessDay) was allegedly credited to PAC Holdings Limited chief economist/head, investment research, Moses Ojo.

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The company said this did not represent the position of the company as it usually scrutinised whatever comes out of its research team to the public.

“This is to state clearly that this malicious news neither emanated from us in PanAfrican Capital Holdings Ltd nor from our chief economist – Moses Ojo and we take exception to associating us as an entity with this news. As a responsible entity, we normally

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scrutinise any economic and financial news that emanates from our research desk”, combat said in a statement.

The company disowned the news and urged the general public to regard it as false in the context in which it was issued.

“We enjoin the public to disregard the news in its entirety and be assured that the news does not represent our position on Wema Bank.”

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Is Nigeria heading to stagflation?

CHETA NWANZE

“

Inflation destroys nations and societies as surely as invading armies do. Inflation is the parent of unemployment. It is the unseen robber of those who have saved.

No policy which puts at risk the defeat of inflation—however great its shortterm attraction—can be right.” Margaret Thatcher, October 10, 1980 Upon gaining power in 1979, the Margaret Thatcher administration made the defeat of inflation in the UK its number one priority. The 1970s were a difficult time for Britain inflation-wise.

Inflation, which peaked at 25 percent in 1975, was driven by increased wages, the oil price shock in 1973 and high public spending. Mrs Thatcher understood the damage the inflation did and was willing to do anything to stop it, even at the risk of increasing the country’s unemployment figures.

With Nigeria’s food inflation at 21.79 percent and headline inflation at 17.3 percent in February 2021, the CBN does not appear to be dealing with the issue of rising consumer prices with the urgency that it deserves. The headline index in February, according to the NBS, was at a four-year high, while the food sub-index – which accounts for more than half the inflation basket – was the highest in more than 12 years.

The consumer price situation is compounded by low-output growth and high unemployment. If all this persists, the country could add stagflation to its challenges.

Despite the CBN’s key mandate of ensuring monetary and price stability, one of the major inflationary pressures over the last few years has been the apex bank’s capital controls, which it imposed to conserve scarce dollars. Since 2015, the CBN has banned access to foreign exchange for the importation of an evergrowing list of items.

One problem we have in Nigeria is that we never do much by way of assessing the impact of policies. For example, President Buhari has now admitted the 15-month border closure measure was ineffective. What he did not say, but what most observers know, is that the border closure was a huge factor in the food price increases.

The CBN has tried to fund agricultural exploits in the country, through initiatives like the Anchor Borrowers Programme, but agricultural productivity in Nigeria remains low for a variety of reasons. Agriculture is undertaken by mostly smallholder farmers who lack the means to mechanise their activities.

When there is drought or insufficient rainfall, farm output is affected due to lack of irrigation. Flooding in some parts of the country also leads to the destruction of crops.

A growing number of farmers have abandoned their farms due to rising

insecurity caused by Boko Haram attacks and conflicts between farmers and pastoralists. As far back as six years ago, I spoke with farmers who had stopped going to their farms in Benue, as well as in neighbouring Nasarawa, because of attacks by herders. Last month, Benue’s Samuel Ortom said he was attacked by armed herders when he visited his farm.

Confirming the low-income status of the Nigerian economy, a study by SBM Intelligence showed that 63 percent of Nigerians spend 59 percent of their income on food alone. This scenario just highlights the enormous impact high food inflation has on the Nigerian population as the rising cost of food, which is the most basic essential, will impact on all other expenditure. At the state level, the February inflation data showed food inflation was highest in Kogi (30.47 percent), followed by Ebonyi (25.73 percent) and Sokoto (25.68 percent).

The IMF has called for a reform of the CBN’s monetary policy operational framework as a means of tackling inflation. Key among the Fund’s recommendations is for the CBN to curtail its financing of the government’s budget deficits. As the government’s revenue plunged in recent years, the CBN scaled up its Ways and Means facility (WMF) for funding government budgets. Fitch goes further than the IMF in its warning, saying the increase in the use of the WMF raises macro-stability risks and limits the CBN’s ability to control inflation.

The way out is in tax revenue, but to

‘

Despite the CBN’s key mandate of ensuring monetary and price stability, one of the major inflationary pressures over the last few years has been the apex bank’s capital controls

Nwanze is Lead Partner at SBM Intelligence

Value added tax considerations for casino operations in Nigeria

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y product category, the global betting market can be broadly segmented into lottery sports, casinos and games and online betting. Due to the high popularity of lotteries globally, this was the largest segment of the market in 2018 as it had about 46% of the market share during the period. Casino activities have witnessed growth over the last decade due to technology advancement, digitization and the relaxation of laws guiding their operations across various countries. There has also been an increasing demand for online betting due to increasing number of youths in the population, digital revolution, live sports betting and ease of access to betting platform on mobile applications.

This trend is expected to lead to market penetration and significant growth of this segment.

In Nigeria, the most popular form of these wager activities are sports betting (football league promotions, the pools etc.), the lottery and slot machines. Other segments of the Nigerian Gaming industry include gaming machines, scratch cards and interactive games, promotional lotteries run by various companies. It is expected that technology will continue to play a key role in developing and shaping the industry in Nigeria.

Regulatory Framework in Nigeria At the federal level, the industry is regulated by the National Lottery (Amendment) Act 2017 and the National Lottery Regulatory Commission (under the National Lottery Regulation, 2007 while at the state level, it is only Lagos state that has the Lagos State Lotteries Law 2008 (LLL). Other states in Nigeria and the Federal Capital Territory, Abuja are yet to enact any lottery laws. Therefore, these regions rely on the provisions of the National Lottery (Amendment) Act 2017 (the Lottery Act) and the National Lottery Regulation 2007 (the Regulation).

The Lottery Act defines “Game” as pari-mutuel

and fixed odds and any other lottery that has the nature and character of the game. Further, Lottery is defined in the Lottery Act to include any game, scheme, arrangement, system, plan, promotional competition or device for the distribution of prizes by lot or chance, or as a result of the exercise of skill and chance based on the outcome of sporting events or any other device which the President[3] may be notice in the gazette declare to be lottery and which shall be operated according to a licence.

This article focuses on the VAT considerations for Casino operations in Nigeria in light of the Finance Act 2020 and National Lottery (Amendment) Act 2017.

It is worthy of note that the Casino (Licensing) Law 1964, which was the first attempt to legalise and regulate the industry, defined a Casino to mean any building in respect of which a license has been issued and to which members of the public authorized by the licensee, have access for the purpose of playing prescribed games of chance.

The Finance Act 2020 and VAT Considerations for Casino Activities Gaming houses (for instance, Casinos) earn revenue on gaming activities by: 1. either charging the punters/patrons/bettors an entrance fee, commission for entry or to place a stake, or a fee for using the gaming facility or 2. earn revenue from the positive difference between the amount staked and the patrons/ bettors’ winnings.

While it has been a long-standing debate on whether the casino activities are by their nature services and therefore the applicability of VAT has been called to question, some countries have deemed this a supply by virtue of their extant provisions (for instance, South Africa).

It is often said that patrons of Casinos derive www.businessday.ng

NANA ABU

some form of social amusement from the gaming activity, thus “entertainment” in the form of lottery and gaming services are provided by the Casino operators. The VAT Act defines “entertainment” to include any exhibition and performance in which the admission of people is subject to payment by such persons albeit some specified exceptions.

Based on the above, key questions that comes to mind include: a) Could the gaming houses be said to be supplying a service? b) Where the gaming house/ casino does not charge an entrance or admission fee, would VAT be applicable?

Section 2 of the VAT Act as amended by the Finance Act 2020, provides that the tax shall be charged and payable on all supplies of goods and services in Nigeria other than those listed in the First Schedule to the Act (i.e. exempt goods and services and zero rated goods and services).

The amendments to the VAT Act by the Finance Act 2020 appears to have put some clarity to this in the definition of a service for VAT purpose. The Finance Act 2020 has defined service to mean: a) anything, other than goods, or services provided under a contract of employment; and b) includes any intangible or incorporeal property (product, asset or property) over which a person has ownership or rights or from which he derives benefits and which can be transferred from one person to another, excluding interest in land and building, money or security.

From (a) above, anything that is not a good or services provided under a contract of employment can be classified as a service. Further, in so far as the service does not fall within the category listed in the First Schedule to the Act, then it is liable to VAT. On this basis, the argument that gaming activities in casinos should not be considered

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mobilise that effectively to fund its budgets, the government needs to create a stable macroeconomic environment for private enterprises to thrive and create jobs, and for businesses and workers to pay their taxes. But a country with 33.3 percent unemployment rate will struggle in terms of generating tax revenue.

Its economic productivity will also be muted as the capacity of citizens to work, spend, save and invest is reduced. Just as important, the ability of the government to bring more people into the tax net will be severely impacted.

The time to stem the downward spiral of the Nigerian economy is long overdue. Following the end of the border closure, it’s also time for the president to end his support of the CBN’s capital controls and other anti-free-market policies. The government’s prime macroeconomic objectives – which will also help in defeating food inflation – should include pursuing economic growth that benefits all Nigerians, achieving food security by protecting farmers and promoting sustainable agricultural strategies, reducing poverty through more effective social investments, and prioritising human capital development. The country is in dire need of a restoration of public trust in government.

VATable may no longer be tenable.

However, the Lottery Act introduced a special tax regime for lottery companies in Nigeria. Specifically, section 35A (1) and (2) of the Lottery Act provides that there shall be imposed and charged a tax to be known as the Lottery Companies Income Tax (lottery tax) at the rate of 7% on the net proceeds of the licensee at the end of each assessment year, to be administered and managed by the Federal Inland Revenue Service (FIRS).

Where a licensee has been assessed for lottery tax in any year, the licensee shall be exempted from the provisions of the CIT Act and the Value Added Tax Act (“VAT Act”).

From the above, Casino operators may be faced with multiple taxes as the provisions in the Lottery Act contravene those of the VAT Act (as amended). While the Lottery Act specifically exempts VAT from casino operators, the VAT Act has defined services to be widely encompassing and therefore the casino operator may have to comply with the provisions.

Further and to buttress the above, the FIRS during a stakeholders’ meeting organised in conjunction with the National Lottery Regulatory Commission in 2019, stated its plans to charge VAT on gaming activities and automate VAT collection from operators in the industry. Given that the Finance Act 2020 also provides for the automation of the FIRS system with the taxpayers’, via the deployment of technology and process automation, it is necessary for the FIRS to communicate clearly the modalities for the collection /remittance of the VAT due on gaming activities.

Abu is a manager in the Tax Regulatory, People Service Division in KPMG Nigeria. The author can be contacted at nana.abu@ng.kpmg.com

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Trust is the solid rock of leadership STRATEGY & POLICY

MA JOHNSON

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s a leadership enthusiast, I have been pondering about the importance of trust in the life of a leader. Trust is an important thing that binds followers to their leaders. As the most populous black nation on earth, we have seen our trust in leaders go up and down during the last couple of years. How critical is trust for a leader? Our leaders cannot repeatedly break trust with almost 200 million people and think they will continue to inspire us.

Trust is the solid rock of leadership. The incessant incidents of insecurity in the country have disillusioned many Nigerians with leadership in Nigeria. Public intellectuals are disturbed as they ask: “Insecurity – Will 2023 Polls Hold?” (Vanguard April 17, 2023) “……Nigeria faces third year of a decade challenges…. How Nigeria surmounted 1953, 1963, 1973, 1983, 1993, 2003, 2013 hurdles.”

Going by the calendar of the Independent National Electoral Commission (INEC), the 2023 presidential election is 671 days away. The INEC

Chairman, Professor Mahmood Yakubu sometime announced that February 18, 2023 is the date for the 2023 presidential election. Since the date was fixed, the polity has been charged as throngs of presidential contenders and pretenders criss–cross the length and breadth of the country strategizing, aligning and realigning.

Amid these, there are fears that the election may not hold. Reasons: Increasing waves of insecurity and climate violence, agitation for secession by some parts of the country, and insistence by many groups and leaders that the country must be restricted with fiscal and other powers devolved to the federating units before elections could be held. Besides, it was argued that the year 2023 is the third year of a decade, which usually presents Nigeria with a bouquet of survival threatening challenges as have been witnessed in the last 70 years.

“Bandits Operating in 24 States – Ortom,”– The Sun, 16 April 2021.

“Governor of Benue State, Samuel Ortom, revealed that bandits were operating in at least 24 out of 36 states of the federation and the Federal Capital territory (FCT). He warned that if not checked immediately, there may be food crisis across the country. He said the country’s demographics would also be affected, adding that many of those perpetuating the crime were not Nigerians.” Anyway, rising food costs may add to the misery of Nigeria’s high unemployment.

“On the growing trend of kidnapping, Ortom said: There is another lucrative business in Nigeria with strong

suspicion of connivance with government officials. The rise in kidnappings of all categories of people across the country is a dangerous trend. We don’t know who is telling the truth. But as it stands, there is a strong allegation that desperate politicians brought into the country foreign mercenaries to help them with elections.” There is a thin line between truth and falsehood. I am sure that at the fullness of time, we shall all know the truth and the truth shall set us free.

Impunity at all levels of government. Senator Ndume, the Senate Committee Chairman on Army, on his part said: “About 11 soldiers were killed in Benue and as I speak, not one person has been arrested. Instead, Ortom is telling us that the perpetrator would be brought to justice. Let me tell the governor and other elected leaders that they’ll account for those killed in their states.”

The leadership from the top to the bottom has failed Nigerians. The elite conspire and they never disagree.

They are always together. But the ordinary people are the ones fighting over tribe and other irrelevant things.

The leaders have failed us, especially those in the Executive side because they implement programmes of government.

We can continue to blame ourselves. Nothing will change. At some point, we must agree on how we will fix this country. In Borno for instance, a whole local government was overrun by Boko Haram terrorists and our people had to flee to Niger Republic.

‘

The leadership from the top to the bottom has failed Nigerians. The elite conspire and they never disagree. They are always together

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

Dynamic self understanding: Pursuing personal excellence

“

Excellence is a superior quality, but it is always a moving goal as we are never there fully” - Wayne Ottenbreit.

The annual business meeting of the Humanistic Management Network (HMN) was an insightful and timely one as we’re gradually coming out of a global pandemic and adapting to a new normal, trying to get in-depth understanding of ourselves and our capabilities beyond what we are used to, and finding ways to excel at them.

HMN-Nigeria is part of an international, interdisciplinary, and independent network that promotes the development of an economic system with respect for human dignity and well-being as well as accelerating transition towards a life-conducive economic system.

Everything we do is imbedded in our world view, including things (constructs) we consider valuable; For example, family, friends, fame, wealth, power, learning and so on, and these impacts our decisions and how we do things. For example, if we prioritize money, we will find ways to make more and get richer. If family, we will find ways we believe serves them better.

How do we then structure our lives for excellence? The best way to do this is to base our lives on principles, which are stable qualities that give meaning and direction to all aspects of our lives. A great and practical way to think of these principles are the cardinal virtues which can be described as foundational descriptors or good human living. The cardinal virtues

are: Prudence/wisdom, Justice, Fortitude/ strength of will, Temperance/self-control.

These, along-side theological virtues based on Christian traditions: Faith, Hope, Charity/love.

If we think about it, every good quality we have, or lack, are based off aspects of these seven virtues, hence, excellence then fundamentally includes seeking to grow in these virtues. How do we then go about achieving or improving upon a principlecentred life?

1. Being proactive is important ; This is taking intentional responsibility for one’s own life. It involves acknowledging that we are key agents for our life’s decisions. We are the primary authors for what happens as we make choices in response to opportunities and challenges. We are never victims and we can always make a change. By doing our part, the only part we can do, we contribute to the growth of virtues everywhere. Being successful at this also entails assessing our strengths and shortcomings, what is reasonably within our abilities and where we need to look outwards. It is also beneficial to investigate, and reflect upon our family of origin, multiple cultural orientations and natural dispositions. Although these do not fully define us, without greater energy and will, we tend to repeat patterns we have been used to. However, it is always within our capabilities to create something new: •What have we learnt about ourselves; strengths and weaknesses, pattern of think-

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ing and acting)?

•What do we need to understand better?

•Where can we get information?

2. Begin with the end in mind; This is a great place to start our journey towards a more excellent version of ourselves and it means defining what excellence means to us as individuals and the desired outcomes we seek. Virtues may be universally important to master but it should not be our only focus. We all have multiple important roles in life that show up differently daily. Sometimes glorious and other times challenging.

Excellence requires that we plan for these by considering that not only is today the first day of the rest of our lives hence we can begin whatever changes we choose at any time, but until tomorrow, it is also the last and we should take responsibility for the finite nature of each moment. So, what are the requirements needed to be an excellent parent, student, boss, professional, friend and so on. Requirements, however, are not the only place for us to seek excellence.

In his work in counselling and personal development, Wayne uses a model he calls “seeking life’s fullness”. This is based on the premise that there is much more joy and potential available to us than we realize in the very act of our pursuit of excellence, but we settle for less because it involves some effort in reflection, intentionality and energy.

•What could be better/different?

•What ideas really excite and inspire you?

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This has to stop.

The judiciary has remarkably gifted judges, but question of trust has undermined their leadership roles as one of the arms of the government.

“How Nigerians Go Through Costly, Tortuous Walk to Justice,” – Daily Trust, April 17, 2021. Findings by the Daily Trust revealed that “The delay in the administration of justice has forced many to abandon their cases in court……” “Many Nigerians seeking for justice in law courts have to spend a lot of money in form of legal fees and other charges before they succeed.”

“My prayer is never to have anything to do with a police station or a court because it would involve spending money even if you don’t have it,” said Fatima Yusuf, a trader at Utako Market. “My N12million is trapped somewhere and I have spent over N2million to recover it to no avail. Your travails start from police station where you have to sponsor detectives to trace the culprits. After arresting him, they will process the case and then take you to court where a new layer of spending will start,” she said. Character makes trust possible. And trust makes leadership possible. Our leaders cannot lose trust and think they will continue to influence their followers. Trust is the solid rock of leadership. Thank you.

AYO AYENI •What talents can you bring to benefit others considering that while many others have your exact talent(s), no one has your unique combination of talents, life experiences and approach.

3. Set Priorities; It is important to prioritise. We must understand our unique qualities, virtues, world view, approach, responsibilities and opportunities and the way we can use them to make the world better. We can ask ourselves these questions: •How well do I use my time and energy?

•Could I reasonably use them better?

•What would be the consequence of using them better?

In our pursuit of personal excellence, we must be committed to being intentional. It helps to make use of the imaginary benefit of hindsight. Envision yourself in the future you want and weigh how current decisions and choices affect you, your relationships and wider society both now and in the long run.

Wayne’s discussion was based on the book “The 7 Habits of Highly Effective People” by Stephen Covey.

Ayeni is a Business & Family Life Strategist, Advocate for Women & Children’s Wellness & Perinatal Mental Health Care Practitioner, and member of the Humanistic Management Network, managed by the Christopher Kolade Centre for Research in Leadership and Ethics, Lagos Business School. Contact: crle@lbs.edu.ng, hayouronline@ gmail.com.

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Social value creation: African firms & the SDGs (5) Status of the Sustainable Development Goals in Africa Goal Description 1 No poverty

2 Zero hunger

3 Good health and well-being

4 Quality education

5 Gender equality

6 Clean water & sanitation

7 Affordable & clean energy

8 Decent work & economic growth 9 Industry, innovation & infrastructure

10 Reduced inequalities

11 Sustainable cities & communities

12 Sustainable consumption & production 13 Climate action to CO2 emissions.

14 Life below water 15 Life on land

16 Peace, justice & strong institutions

17 Partnerships for the goals

RAFIQ RAJI

A

frican businesses can contribute to the economic development of their host economies by deliberately seeking to create social value. Market-based solutions to social problems have been found to produce optimal public goods. And even by simply pursuing excellence in the normal course of business, a private goods firm could create social value similarly. Incidentally, Africa is ideally suited for global, pan-African and local firms looking to create social value at scale.

My SDGs-SVC-Development model is a simple but encompassing framework that guides firms on how they could easily help with filling the continent’s myriad developmental gaps and needs. It relies on the United Nations’ Sustainable Development Goals to scope the continent’s development needs. Relying on various literature, I show how aiming for the SDGs creates social value. I also highlight the unique African case where but for increased engagement by all stakeholders, especially the private sector, targets for the SDGs are not likely to be realised.

Current status 2030 poverty target will not be met by any African region other than North Africa. In absolute numbers, poverty has increased.

With the exception of North Africa, food insecurity in Africa persists at a rate of over 25% Under-five mortality rates are highest in Africa and well above the global average 100% primary enrolment rate by 2030 likely if effort sustained.

More than 50% of African countries already have over 90% primary enrolment rate.

Sub-Saharan Africa average greater than global. Africa leads the world in appointing female legislators.

Access to improved drinking water within a 30-minute round trip is below world average and off-target Half of Africa has electrification rates of less than 40%. North Africa on track to achieve 100% electrification by 2030 Over 40 African countries have unemployment rates of over 5%.

Internet usage in Africa remains very low. Nearly half of African countries have internet access of less than 20%.

Growing evidence shows Africa is one of the most unequal regions in the world. In fact, inequality worsened in 25 African countries between 2000 and 2015.

Africa is relatively less urbanized. 13 countries have formulated and 21 are in the process of implementing national urban policies.

No data available on any of the indicators Africa is the best performing region in the world when it comes No data available to assess progress Good amount of protected land dedicated to supporting diversity.

With focused policy interventions, 2030 target could be met.

Number of deaths owing to conflict or terrorism in Africa is significantly higher than the global average.

More than half of African countries have a national statistics plan that is fully funded and being implemented.

How is Africa a better place by your firm being here? How can you use your firm’s expertise to solve these social problems? These are the pertinent questions my SDGs-SVC-Development model hopes to enable firms operating on the African continent scope and answer with action.

Since studies on the relationship between busi-

ness and society in Africa is relatively scant, the article’s continental bias is apropos. In Mauritius, a synergistic relationship between business and government underpins its relatively shared prosperity. Vodafone’s Mpesa in Kenya increased financial inclusion, helped in reducing poverty and is now being replicated across the world. Coca-Cola’s usage of its cold logistics and

last mile distribution infrastructure to transport medicines and vaccines is another excellent example of social value creation.

I also highlight the risks inherent in the provision of social services or public goods by the private sector. Under the guise of social value creation, firms have instead resorted to value extraction in many instances.

With more than 400 companies on the continent earning at least US$1 billion annually, the US$500 billion to US$1.2 trillion annual SDGs financing gap for Africa could easily be met if most firms on the continent (if not all) adopt a social value creation mindset.

Beyond financing, firms could also provide expertise to make up for the identified lack of capacity in the civil service and civil society and inadequate data in many African countries.

Additionally, firms could also create social value by virtue of their product and services. And even when firms are not involved in such naturally SVCthemed ventures like sustainable agriculture, water infrastructure, renewable energy and so on, they could easily create social value by simply conducting their operations in an ethical and sustainable manner.

References and figures are available in the original article viz. https:// rafiqraji.com/2021/03/21/social-valuecreation-african-firms-the-sdgs/ “Dr Raji is chief economist at Macroafricaintel.

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

How ready are we to tackle our national security challenges?

I

n this era, we need a new way of thinking to successfully navigate the myriads of problems that confront us as an Individual, organization or a nation.

Last week, I appeared on a popular program (sunrise daily) on the Nigeria Television station, Channels Television. The subject of discourse was to find creative solutions to the national security challenges in Nigeria. After the program, I was inundated with series of calls and messages. While most of the callers lent their voices in support of my perspectives, there were a few others that wanted more light shed on how we could solve the problem using a human-centred approach.

I therefore wish to establish that the current national security challenges fall under what we called complex problems, they are problems that are difficult to define and tackle except we adopt a creative approach that challenges our biases, beliefs and individual interests. National insecurity is a wicked problem that is almost impossible to solve in an atmosphere of poor tolerance for divergent views. You cannot solve wicked problems if they are poorly defined and if your style is more of seeing to be doing something rather than actually doing something and doing the right thing.

Sensitive organisational or national problems need a creative problem solving methodology that embraces all views and labels no idea ‘stupid’. Adopting a divergent and convergent thinking method of a human-centred design approach may be the best framework to tackle this seemingly intractable problem. This approach challenges our rigid way of thinking. A disposition whereby every critical view is naturally

tagged to be anti-establishment makes it difficult to find solution to the problem. To solve complex national and organisational problem, Leaders must transform their mindset and abandon their scarcity mentality that makes them view divergent views with suspicions. This type of thinking stifles innovation, unfortunately, those who are at the receiving end remains the people. How can we employ divergent and convergent thinking to solve national or organisational problem such as insecurity or poor performance? This piece aims at giving a bit of explanation of how the approach works and how it could benefit adopters.

To stay creative and remain open to new ideas as a leader, divergent thinking must be embraced. It’s another arrow in your quiver on the way to becoming the best leader possible, as there are great benefits to leaders who adopt a divergent way of thinking.

How divergent thinking works Divergent thinking helps leaders to horn their leadership skills and scale up their creative capability through tolerance for other views. It is about being tolerant to all possibilities. Divergent thinking is a good brainstorming tool, it is useful in an atmosphere that encourage, open, free-flow and spontaneous ideas. It is an effective tool, I like to use on a Design Thinking project, it enables us to work with small group of multidisciplinary teams to discover and define the problem and generate possible solutions which often times comes from lots of fresh and new ideas within a short timeframe. The beauty of this approach is that we get participants to suspend all judgments because most times the best idea may initially appear ridiculous.

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Participants are nudged to do away with biases, to go for quantity of ideas, not quality. Having done this, we also challenge each member of the team to spontaneously build on each other’s ideas, stretch the boundaries of the imagination, come up with wild even crazy, audacious ideas.

If this process is poorly followed, the best idea may be cowed and owner of such ideas suppressed hence the best idea get unmentioned and undeveloped because the atmosphere does not encourage free speech. If Nigeria is to tackle most of her problems especially the problem of insecurity which was undoubtedly propelled by unemployment, poverty, high level of illiteracy, corruptions and injustice then a strong framework that encourage divergent thinking at all levels must be adopted.

Developed nations and flourishing organisations thrive on ideas because they have developed a culture that embraces divergent thinking, a thinking that allows free flow of ideas and a practice that ensures that the team collectively pick the best ideas.

Convergent thinking Having generated lots of ideas, it is now time to move through the process that carefully narrows those ideas so that the best ideas may emerge. The convergent thinking phase can be likening to a fisherman approach in separating his catch. With the catch in the net, he carefully separates then in order of value, remember that there is hardly any catch that is not useful to the fisherman. Convergent thinking enables you to narrow down a large number of ideas through the process of analyzing, judging, eliminating and selecting. It enables teams to evaluate without bias the suitability of each idea, separating

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OLUKUNLE A. IYANDA them into the low-hanging fruit, barely feasible, and the dream concept. Convergent thinking helps us to gain clarity, examine barriers, draw conclusions, determine the bottom-line, and select the best ideas. Can this process be adopted in tackling the insecurity problem in Nigeria, the answer is yes, if done with sincerity.

The current government must demonstrate its sincerity to want the problem resolved. The problem of insecurity will be a thing of the past if the underlying problem of exclusion, discrimination, poverty, unemployment, injustice and corruption can be tackled. To tackle this problem, the citizens must be at the centre of all solutions. The process must be owned by the people. The idea of decision-by-fiat is archaic and ineffective. The leadership practices of exclusion and suppression is a major fuel for agitation. Until the users are placed at the centre of the solution and until leaders lead with empathy, any efforts towards solving complex problems will be an unfortunate waste of resources.

Iyanda, PhD, FCA, SFNLI is Managing Partner/CEO, BROOT Consulting, Nigeria. +2348039788027

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Tuesday 20 April 2021

BUSINESS DAY

EDITORIAL PUBLISHER/EDITOR-IN-CHIEF

Frank Aigbogun EDITOR Tayo Fagbule

DEPUTY EDITORS Lolade Akinmurele John Osadolor, Abuja NEWS EDITOR Osa Victor Obayagbona NEWS EDITOR (Online) Chuks Oluigbo MANAGING DIRECTOR Dr. Ogho Okiti EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha GM ADVERT Ijeoma Ude GM CONFERENCES Obiora Onyeaso GM BUSINESS DEVELOPMENT (North) Bashir Ibrahim Hassan GM BUSINESS DEVELOPMENT (South) Ignatius Chukwu GM DIGITAL SUBSCRIPTION SALES Rerhe Idonije BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai COPY SALES MANAGER Florence Kadiri DIGITAL ADVERT SALES MANAGER Linda Ochugbua HEAD, HUMAN RESOURCES Adeola Obisesan

Rising kidnap cases and Nigeria’s security funding

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idnap for ransom has, arguably, become the poster child of Nigeria’s security dilemma.

School children seem the easiest targets, from Chibok, through Dapchi, Kankara and Afaka.

Still counting.

Nigeria’s security situation can be likened to a mother hen that cannot protect its chicks against the hawk.

Although unlike the mother hen, Africa’s most populous nation has inadvertently empowered its predator by the way it funds its security and law enforcement agents and a deficient system of gathering, sharing and using intelligence.

Nigeria exemplifies the insecurity situation on the African continent.

The rising concern about insecurity cannot be explained outside the numerous terrorist attacks by the Boko Haram and bandits.

These insurgent and terrorist groups have claimed responsibility for a litany of kidnappings in exchange for ransom. The crime rate is rising. There is also the emerging culture of violence perpetuated by legal and illegal revenue collectors, youth militancy and cultism, the herdsmen-farmers conflict and other factors of insecurity that have been a regular feature of life in the country.

The security of lives and properties is a statutorily imposed duty on the government through the law enforcement agents, and a right guaranteed to the citizens of Nigeria.

Against the reoccurring incidents of these factors of insecurity and the

continued reassurance of the Nigerian government to control the situation, there is widespread doubt about the capability of the Nigerian government to provide adequate security for her citizens and others living within its territorial boundaries.

Some have argued that a major reason for Nigeria’s inability to deal with the rising insecurity is poor security funding and a deficient preventive intelligence gathering system. In the last 10 years, Nigeria has reportedly spent 6 trillion on security amid a worsening security situation. In fact, the latest figures from the global terrorism Index (2019) ranked Nigeria as the third-worst country exposed to terrorism with no improvement recorded since 2017.

Among countries with similar security challenges, Nigeria’s death toll from terrorism has increased. Save for Afghanistan, the total number of deaths in Iraq, Somalia, and Syria fell.

When Tukur Buratai, Nigeria’s former army chief, requested for the cap on military spending to be removed, this shot Nigeria’s security budget to the second-largest in sub-Saharan Africa.

Buratai’s request was to help free-up funds in the fight against terrorism.

Nevertheless, Stockholm International Peace Research Institute (SIPRI) has shown that Nigeria’s $1.90 billion military allocations in 2019 were only second to South Africa’s $3.50 billion and Algeria’s military expenditure of $10.30 billion. It is also worth mentioning that Nigeria’s military allocation fell by 8.20 percent compared with 2018.

Nigeria’s nominal position of having the second-largest military allocation

in sub-Saharan Africa begins to pale out when compared to South Africa through the prism of population.

With a population of 59.62 million people, South Africa’s $3.50 billion military allocations represent $58,705 per head. But Nigeria’s $1.90 billion military allocations for 2019 means $9.50 per head. From this angle, it becomes clear that Nigeria’s security spending per capita is abysmally low.

There is no doubt that beefing up security in Nigeria requires additional spending on both the military and other security agencies. But there are studies that also show that Nigeria’s security funding architecture has in some instances bred corruption.

In a 2018 report, “CAMOUFLAGED CASH, How ‘Security Votes’ Fuel Corruption in Nigeria,” Transparency International Defence and Security argued that, although security votes are a relic of military rule, it continues to exist. These funds are provided to certain federal, state and local government officials to disburse at their discretion.

Among average Nigerians, the phrase ‘security vote’ is synonymous with official corruption and abuse of power. Yet the beneficiaries of security votes – politicians and security officials – argue that they are needed to subsidise the operations of Nigeria’s overstretched and underfunded federal security agencies.

Transparency International estimates that these secretive, unaccounted-for cash expenditures add up to over $670 million (N241.2 billion) annually.

An analysis of 29 state budgets (no data exists for 7 states) shows they spend

an average of $580 million (N208.8 billion) in total each year on security votes.

Federal government security votes average over $50 million (N18 billion) annually. Assuming the chairpersons of Nigeria’s 774 local government areas each receive on average $55, 000 (N20 million) in security vote funding each year, local government security votes would amount to another $42.6 million.

Even though security votes lack any legal or constitutional basis, it is unlikely that federal, state and local government entities will stop using them without being compelled to do so.

A ban on the use of security votes should be accompanied by legislation specifying budgeting procedures and criteria for security expenditures.

These should meet international best practices, incorporate oversight mechanisms, transparency standards and strictly defined conditions for the use of contingency funds or ‘black budgets.’

Additionally, sophisticated intelligence gathering in Nigeria has not come of age. The Nigeria Police do not possess the required skill to secure a crime scene, conduct efficient evidence-gathering procedures such as lifting fingerprints from a crime scene.

There is no credible criminal database, limited capacity to use forensic science in solving crime, and so on. Until recently, we could not trace a criminal using his mobile phone records.

Ensuring transparency, accountability in Nigeria’s security budget execution and improving the use of forensic science in solving crime offer Nigeria pathways to the protection of lives and properties.

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 Konyin Ajayi

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14

Tuesday 20 April 2021

BUSINESS DAY

COMPANIES&MARKETS FBNQuest recommends Commercial Papers, Bonds as Funding Sources for SMEs, Corporates ENDURANCE OKAFOR

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mall and mediumsized enterprises (SMEs) as well as c o r p o rat e s w h o are seeking to raise working, expansion capital, refinance expensive debt and better match their cash obligations with revenue should consider commercial papers and bonds, according to FBNQuest Merchant Bank, the investment banking and asset management group of FBN Holdings.

Regardless of the recent uptick in interest rate, the relatively low-interest-rate environment in Nigeria, according to analysts at FBNQuest holds an opportunity for companies to raise cheap capital.

“Though interest rates have trended higher in the first quarter of this year, there is still significant scope for many companies to access cheaper and more stable funding from investors who are seeking well-run businesses with predictable cash flows to invest in” Oluseun Olatidoye, Head Capital Markets, FBNQuest said at the bank’s latest edition of the Leading Conversations with FBNQuest webinar series.

Access to early-stage

finance is one of the critical challenges of many corporates and SMEs in Nigeria.

The impact of COVID-19 made it even worse for many of the enterprises who, before the pandemic were struggling to survive amid the fragile state of Africa’s largest economy.

Hit by the double challenge of COVID-19 and slow economic growth, businesses in Africa’s most populous nation are now more vulnerable as constraints in liquidity and cash flow coupled with increased payments delays have resulted in endemic

depletion of working capital. ”We believe that corporates can lower the interest paid on bank debts by up to 4 percentage points by issuing commercial papers. Loans also offer other tremendous benefits in the current macroeconomic environment,” Sumit Jain, Senior Executive Director at Valency International, an ingredient supply Chain Company said.

According to analysts, SMEs are the bedrock of the Nigerian economy as over 41 million small businesses account for over 95percent of all businesses and con-

tribute over 50percent to the economy.

Four Nigerian companies raised N27.41 billion through alternative finance- Commercial Paper, in the first three months of 2021, thanks to the low-interest-rate environment that paved way for corporates to access cheap capital.

Compared to the doubledigit interest rate the companies would have raised the funds some three years ago, the four corporates from the different sectors of the Nigerian economy accessed the short term capital at a

L-R: Olusegun Obasanjo, former president of federal republic of Nigeria; Ola Oresanya, CEO, Ogun State Waste Management Authority (OGWAMA), and Toyin Obatosin, director, commercial services, OGWAMA, after Obasanjo’s installation as OGWAMA grand patron in Abeokuta.

Sterling Bank’s OnePay offers payment solution for retailers HOPE MOSES-ASHIKE

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terling Bank Plc has launched OnePay for Business, a mobile app that empowers merchants to use their mobile phones as Point-of-Sales systems. It allows merchants and their customers to receive and make cardless, contactless and cashless payment for goods and services in a nearcash form using QR Code, Bluetooth and PaywithSpecta.

Introducing OnePay for Business in Lagos, Dipo Alabede, group head, digital banking at Sterling Bank, said it meets the need for a hygienic payment method in a COVID-19 world. “The contactless payment feature on the app is essential for merchants and customers because it keeps both safe as the world combats the coronavirus pandemic.

It is also an effortless way to make payments.”

According to Alabede, OnePay for Business is easy to use and available for download on the Android Play Store

and iOS Store. It requires a smartphone with an internet connection to set up. After setting up, customers can log in to use payment options that include QR Code, nearby payment (Bluetooth) and PaywithSpecta.

A QR code is a unique barcode containing the merchant’s business name, QR merchant ID, and other information encoded into it.

Instead of manually entering data into their mobile phones, customers would scan a merchant’s QR code using the QR feature on their app to start the payment process.

Alabede explained that customers could make payment using the app’s QR feature if it is enabled as a part of their mobile banking offerings. “To pay merchants, customers have to open their OneBank app or any other bank mobile app to select the QR service option, validate and complete the transaction.”

He identified being able to make payments anytime and anywhere, even without a wal-

let or sufficient cash at hand, as one of the benefits of using the Sterling QR Service. He added that merchants could also accept payments anytime and anywhere by using the mobile app.

Urging merchants to download and use the app, the Executive Director, Commercial Banking at Sterling Bank, Tunde Adeola, noted that it would save them money and reduce their cost of operations. He added that the bank looks forward to supporting all merchants that will download and use OnePay for Business.

Olayinka Oni, Chief Digital Officer of the bank, described OnePay for Business as another means of enriching lives through immediate settlement value for merchants.

He assured merchants and customers that the bank will continue to enrich the product, ensuring that it delivers on its promise leveraging the Nigeria Inter-Bank Settlement System (NIBBS) ecosystem for its overall benefits.

Oni said Sterling Bank is

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prepared to do business with credible partners and happy to partner with the NIBSS on the project.

In a goodwill message, Ibraheem Babalola, Managing Director of Clane Company Nigeria Limited, observed that OnePay for Business is revolutionary and mind-blowing.

“When you think about the issue the banking industry had had about scaling traditional point of sales from the cost perspective, you will appreciate the impact of this solution on the financial system.”

“Available data indicates that we have about 300,000 active POS terminals servicing over 50 million cards. And the super expensive nature of PoS at about N80,000 per one disqualifies many SMEs from having acceptance terminals.

OnePay for Business accepts several million SMEs into the financial system by empowering them to use their mobile phones as Point-of-Service systems. OnePay for Business is a very innovative product,” Babalola disclosed.

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cheaper rate of an average 5 percent.

Commercial papers represent short term debt instruments issued by large organizations to meet their financial obligations as well as cover short term receivables within a period usually between 15-270 days. Generally, CP carries lower interest repayment rates than bonds due to the shorter maturity date.

Below the record reported some three years ago, the single-digit interest rate on the risk-free yields of Treasury Bills is expected to remain a key driver in the significant growth projected in debt market offerings by corporates at the short end of the market, in commercial papers, and long-term maturities through corporate bonds.

Agusto & Co., a local rating agency projects that more than N1 trillion would be raised in corporate debt instruments in 2021, a 10 percent increase from the N910 billion raised in the previous year. While the low-interestrate environment has been a boon for large corporates who are raising capital at cheaper rates compared to bank loans, start-ups and small businesses, which form the bulk of firms in the country, are left out.

Issues around documentation and inability to meet listing requirements are some of the reasons Nigerian small businesses are unable to tap the low-interest rate opportunity. But according to Coronation Merchant Bank, there is an opportunity for Nigerian start-up and investors through the offerings of Special Purpose Acquisition Companies (SPAC). The Bank believes that SPAC which has become quite common in recent times is the key driver of global equities transactions.

“We think the market conditions have just cast the spotlight on a financing option that discerning companies should consider”, Olatidoye said during the recent webinar with the theme ‘Funding through Commercial Papers and Bonds’.

As one of Nigeria’s leading investment banking institution, FBNQuest has advised on the issuance of several commercial papers transactions for organisations such as Valency Agro Nigeria Limited, Mixta Real Estate plc, Dangote Cement plc, Nigerian Breweries plc (NB), Lafarge Africa plc, Flour Mills of Nigeria plc (FMN), Wema Bank plc, and UACN Property Development Company plc (UPDC) to mention a few.

Farmsponsor leverages fintech Globetrot leverages fintech to to empower local farmers

empower local farmers

ENDURANCE OKAFOR

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lobetrotOKAFOR Farmsponsor Nigeria ENDURANCE Limited, a leading agricultural technology that lobetrotcompany Farmsponoperates across value chain of the sorthe Nigeria Limited, poultry farming business in Nigeria is one of the leading agleveraging fintech to empower small ricultural technology holders’ poultry farmers. companies that operate across The co-founders of Farmsponsor the value chain of the poultry are Bill Kenneths and Chike Akpa farming business in Nigeria Globetrot Farmsponsor createdisa leveraging fintech to empower fintech platform where individuals small holders’ poultry farmers. can empower local farmers to proof FarmduceThe morecofounders food by sponsoring their farm projects.Bill Kenneths and sponsor, FromAkpa the breeders farmFarmto the Chike Globetrot Hatchery, chicken processing plant sponsor created a fintech platand retail outlets, Farmsponsorcan is a form where individuals major playerlocal in the farmers southern region of empower to prothe country. duce more food by sponsoring Froshen Premium Chicken, the their farm projects. company’s branded frozen chicken From breeders’ farm to product canthe be bought from her Frosh the Hatchery, chicken processSupermarket outlets in the city of Port ing plant and retail outlets, Harcourt.

Farmsponsor a offers major player Farmsponsor is also veterinary in the southern of the consultancy servicesregion and produces country, thethecompany said. poultry feed for Farmsponsor OutGrower Scheme foralso poultry farmers.

Farmsponsor offers vetTo participate in her crowdfunderinary consultancy services ing andinvestment producesofferings, poultrydownload feed for the mobile app from Apple theVestpay Farmsponsor Out-Grower or Google for stores.

You can also refer Scheme poultry farmers.

G

Farmsponsor’s value prop-

your friends and earn 500 Naira per referral.

Farmsponsor’s value proposition ositionbut includes but to is ensuring not limincludes is not limited ited security to ensuring food security food in Africa, combating climate changecombating through afforestation, in Africa, climate creating and employment for changewealth through afforestation, stakeholders, agricultural technolcreating wealth and employogy advancement and reduction of ment for stakeholders, agriculagricultural waste. advancement tural technology is why Farmsponsor Agro andThat reduction of agricultural Estate Plan was developed through waste. which individuals can plant 143,000 Farmsponsor ’s value oil palm trees and receive returns on proposition buttheis the products of theincludes plantation for not18limited next years. to ensuring food security in Africa, combating The company has been in operaclimate change affortion since 2018 and isthrough open to receive estation, creating wealth her and more investors for expanding operations nationfor wide employment stakeholders, This investment plan guaranagricultural technology adtees a return ofand 250percent in theof vancement reduction first 5 years andwaste. between 14percent agricultural That is why –Farmsponsor 36percent in the subsequent 13 Agro Estate Plan years.

A micro investment of 100,000 was developed through which Naira gives you a unit of investment individuals can plant 143,000 in this plan. oil Farmsponsor palm trees investment and receive replans turns on the products of the targets these four pillars; availability, plantation for the next 18 years. safety, accessibility and affordability.

Froshen Premium Chicken, By making diverse investments along the value company’s frozen this chain, branded food security in chicken product can be bought Africa can be achieved.

For more information contact us on from her Frosh Supermarket socials @Farmsponsor outlets in the city of Port Harcourt. For more information contact us on socials @Farmsponsor.

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Tuesday 20 April 2021

BUSINESS DAY

COMPANIES&MARKETS

15

Business Event

Great Nigeria Insurance reaffirms commitment to claims payment MODESTUS ANAESORONYE

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nderwriting firm, Great Nigeria Insurance Plc reaffirmed its willingness and capacity to honour all genuine claims as and when due, just as it has paid out a total of N501.59 million to her various insured across the country in the first quarter of 2021.

The organization is a composite entity licensed to underwrite both Life and Non-Life insurance business.

Oyinkansola Sobande, corporate communications & brand manager of the Company said that the underwriting firm is keen on paying claims and making its customers happy.

She, however, stated that the claims experience so far this year has been very alarming which she attributed to the downturn in the economy. According to her, “every insured wants to claim at every given opportunity

...pays N501million Q1 which impacted the claims figure since the occurrence of the pandemic”.

The summar y of the claims composition paid in the first quarter of 2021, shows that Group Life had the highest figure of N422 million while General Insurance business claims amounted to N79 million.

For the general business, Fire ranked first with total claims of N32.2 million, while General Accident recorded N25.8 million. The total sum of N12 million was paid on Motor Insurance, while Engineering gulped N6.7 million; Oil and Gas Insurance stood at N1.1 million, and Marine Insurance was N0.96 million.

While commenting on the intent of the organization as regards claims settlement, Cecilia O. Osipitan, managing director/CEO, said, “there is no compromise to claims settlement in Great Nigeria

Insurance Plc because the major focus of the company is to ensure that our customers get to enjoy the benefits of taking out any form of insurance policy with us through a prompt settlement of their claims when the need arises.

That to us is the only way to prove that we are well and alive to our responsibilities as an underwriting firm in the country. We intend to uphold this obligation and we will continually strive to make good our promise at all times to delight our esteemed customers”.

Osipitan further stated that the company has put in place a friendly-claimprocess with the major aim of putting smiles on the faces of its various customers across the country by ensuring that claims are settled within the shortest period possible on completion of all necessary documentation.

Matthew Ohio appointed as Director of Musical Copyright Society of Nigeria IFEOMA OKEKE

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he Musical Copyright Society Nigeria (MCSN) has announced the appointment of Entertainment entrepreneur and investor Matthew Ohio as its newest director on its board effective 18th, March 2021.

The appointment was announced alongside that of veteran musician Sunny Neji and Asha Fapohunda (Gangali).

The nomination and appointment of Matthew Ohio was based on his vast interests and representations in the music industry upon which MCSN would leverage to increase the quality and quantity of its membership and huge repertoire.

His appointment came after the General Council (the Board) of MCSN at its meeting unanimously approved the nominations of the three music personalities as members of the Society’s Board of Directors.

With a background in Communications from Olabisi Onabanjo University, Matthew founded El’Carnaval Limited, an entertainment company with a core focus on concerts production, experiential marketing, production management, touring and artist booking. Since its inception, the outfit has created events and concerts for leading brands

such as MTN Nigeria, Remy Martin, Glenfiddich, Diageo, Hennessy, MTV Base. Mathew also sits on the Felabration organizing committee and has been in charge of curating the widely celebrated Festivals line up since 2010.

His iconic music show activation; Industry Nite was instrumental in platforming some of Nigeria’s biggest entertainment exports, birthing careers for entertainers such as Yemi Alade, Sean Tizzle, CDQ, DJ Spinall, Hype man Manolospanky and Jimmie, Ycee, Burna Boy amongst others.

The show also launched Mavin Records, DMW, MI’s Loopy Music alongside other indie record labels.

In his words “I feel grateful and honoured to be appointed as a Director of the Musical Copyright Society of Nigeria (MCSN). I intend on carrying out my duties in the interest of the music industry and its practitioners at large while www.businessday.ng

applying my knowledge and resources to bring value to the MCSN”.

In this new capacity, Matthew will offer directorial contributions to -The Musical Copyright Society Nigeria- the only government-approved music collecting organization.

Mayo Ayilaran, the Chief Executive Officer of MCSN, while announcing the appointments commented that the appointments signify the inclusion of more hands to work for the building of the required structures for the music industry and strengthen the capacity of the collective management of copyright in Nigeria. He assured that with PMAN and MCSN partnership, prosperity for the Nigerian music industry and musician is certain.

The Musical Copyright Society Nigeria (MCSN) is an incorporated collective association of authors, composers, arrangers and publishers of music.

Before Nigeria gained independence from Britain, most Nigerian composers and authors were registered with the Performing Rights Society (PRS) and the Mechanical Copyright Protection Society (MCPS), both of the United Kingdom, who were responsible for the collection and distribution of performing and mechanical rights in musical

L-R: Mohamed Fouani, managing director, Fouani Nigeria Limited; Rita Dominic, Nollywood actress and LG Home Appliances’ Brand Ambassador, and Dong Youn Kim, managing director, LG Electronics West Africa Operations, at the official brand ambassadorship signing ceremony held in Victoria Island, Lagos.

L-R: Auwal Musa Rafsanjani, executive secretary, Civil Society Legislative Advocacy Centre (CISLAC); Nnimo Bassey, director, Health of Mother Earth Foundation; Jaye Gaskiya, converner, Take Back Nigeria Movement, and Casmir Ifeanyi, public, health Expert/Analyst, Medical Molecular Microbiologist, during a stakeholders’ meeting on the state of Biosafety in Nigeria held in Abuja. Pic by Tunde Adeniyi

Rebecca Barka, Woman Leader New Kuchingoro IDP Camp; Godspower Utawure, Activation Manager, CHI Limited and Luka Yathuma, Secretary, New Kuchingoro IDP Camp during a visit by the Hollandia Nurture a Child Initiative to provide Dairy Nourishment to Children at the New Kuchingoro INternally Displaced Persons Camp Camp in Abuja recently

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Buki Ponle (l), managing director, News Agency of Nigeria (NAN), presenting a cash reward of N25,000 to Cecelia Onugugba, the ‘best reporter despite the COVID-19 Pandemic in 2020’, during the NAN Reward and Sanction 2020 Awards at the agency’s headquarters in Abuja.

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16

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Tuesday 20 April 2021

BUSINESS DAY

INTERVIEW Our multibank portal is helping corporates optimize operational structures - Onyebuchi CHUKS ONYEBUCHI, CEO - Union Systems Ltd, in this BusinessDay interview, speaks about the country’s recent trajectory and innovations.

L

ast year, Union Systems won the award for “Trade Finance Software Solutions Provider of the Year” beating several global IT firms operating in Nigeria at the prestigious BusinessDay Banks’ & Other Financial Institutions (BAFI) Awards. How did your team accomplish this feat?

We have been in the industry for over 25 years implementing banking solutions. In 2008, we decided to focus more on international trade finance by implementing international trade finance applications from an international partner software company. During that time, we went beyond selling their software to banks to implementing and supporting our bank clients. Through that experience, we came to master all the nooks and cranny of international trade in the region and understood the gaps that were yet to be filled due to the peculiarities of regulation in Nigeria. It was based on this understanding and the realization that international software companies were never going to fix the local issues that we developed Trade-X. Trade-X was our first attempt to build an application that was tailored to automate all the local regulatory requirements in the market. Since the launch of Trade-X, we have launched other trade finance software products and can confidently say that we have achieved full end-toend automation of International trade in Nigeria. It is the culmination of all these products we built that helps banks achieve full automation of their trade operations that put us ahead and qualified us for this award.

Union Systems has built a strong reputation offering software solutions to the financial services sector.

What was the strategy behind your company’s decision to focus on that sector as against diversifying to oil & gas, government finances, and others?

The background of the founding directors of the company is steeped in offering software solutions to the financial services sector and because of our understanding of that sector, we decided to specialize there. We did not want to be a jack of all trade, we wanted to specialize in the financial sector and proffer software solutions that will serve that sector.

Another aspect of our decision to specialize was because at the time of the company’s formation the only active sector that was willing and able to pay for software was financial services. There were 81 banks at that time and these banks needed to be served and there was a dearth of skill set in financial software for banks so we decided to fill that gap.We saw the market as an untapped market and decided to serve that market.

You recently launched Optimus which is the first multibank trade finance corporate portal in Nigeria. What inspired this product and what does it mean for the market?

Optimus was created as an answer to

Chuks Onyebuchi

the issues that corporates have raised and clamored for over the years. For some time now, corporates involved in international trade especially the large corporates have always clamoured for a portal where they can initiate and manage all their trade transactions with all the stakeholders in their value chain – Banks, suppliers, logistics, etc. They wanted to have a consolidated view of all their trade transactions with all their banks and other stakeholders at a glance from anywhere in the world. Optimus was built to finally give them the control they have been asking for. With Optimus, corporates do not need to log in to different bank portals to have insight into their transactions. It is a very robust portal that is also highly configurable for the corporate to mirror its operational structure within the application.

To your question about what it means for the market, this is a groundbreaking product for the region because this is the first of its kind built with the latest technology. The Multibank portal concept is a rising movement which we are seeing in different continents and we are happy to be leading the movement in Africa.

Let’s talk about Trade-X, atrade finance software developed by Union Systems. What client problems were you trying to solve, and what has been the market response?

Most international trade finance systems offer generic international trade-based solutions. These foreign systems do not meet up to 40% of the bank’s requirements because of their lack of automation of the local trade process requirements. Nigeria has uniquerequirements as a result of our regulatory policies.

CBN forms for instance are unique to Nigeria and are not captured in any foreign trade finance software.

At the timewe developed Trade-X

there was no out-of-box automation for the local regulatory trade finance processes. Trade-X came to automate all the local trade finance processes and address all regulatory requirements. The banks reacted positively to the launch of Trade-X because it was a core need for them. Most of them thought it was too good to be true.

Despite the solid skillbase and rich experience of indigenous technology firms like Union Systems, each year Nigerian companies and government agencies still spend billions in international licensing fees and paying foreign developers to create solutions for them.

Why does this persist?

To some extent, the assertion is true however, we are seeing a rise in the adoption of indigenous software. Local companies are beginning to change, they are beginning to see reasons why they should buy indigenous applications. Some of these reasons include dedicated support that indigenous IT companies provide, highly skilled talent, etc. Nigerian developers are among the best globally which explains the skill migration our industry has been witnessing.

Having said that, I also understand that our industry still has some hurdles to cross professionally which impacts some people’s preference for foreign systems. Some Indigenous companies still need to step up professionally with how they present themselves and their products. These little branding issues matter a lot. Do they have standards in the way they develop their products and deliver their service, can they benchmark against international standards? these are things local companies look for that foreign companies give to them.

So local companies that meet these standards can compete on the same level as international companies.

A number of Nigerian fintech companies, especially in the payments processing space, have attracted international attention and funding.

In fact, many aspiring fintech founders consider it a source of pride and validation. Yet, very few of these companies are likely to seek capital from the Nigerian Stock Exchange unlike in the past when a listing on the bourse was the ultimate badge of success. Can you explain why this change in attitude has happened, and what it portends for Nigeria?

There are several reasons for the preference for foreign investors and top on that list is risk appetite. Foreign investors have more risk appetite and a better grasp of the workings of the software industry, unlike local investors who are quite skeptical and expect immediate returns. Foreign investors offer better investments and understand how to properly value a software company.

I will also attribute the change in attitude like you rightly mentioned to the rise of new industries and companies.

Some years ago, fintech was not even a word that was globally acknowledged and so with technological advancement and the need for automation in financial services, there is a level playing field that has been presented. If a payment company is doing as well as its counterpart in Silicon Valley, there is no reason why they should notattract the same level of funding. People’s taste for success has changed. Being praised in Nigeria is no longer enough, being able to build a company from the ground up and be recognized internationally enough to attract credible funding is a cloak of pride that our industry is wearing boldly.

The implication of these positive funding stories is two prongs. On one end, we are putting Nigeria on the map and elevating the software industry but on the other hand, we run the risk of capital and skill flight. If a Nigerian investor puts 1million dollars in a startup we are sure the money will remain in our economy vs the same amount being put in by a foreign investor.

But there is also the problem of economic and political instability in Nigeria which pushes founders to seek out foreign investments instead of listing on our stock exchange.

In recent years, there has been a growing call for more female participation in tech from coding expertise to senior managerial positions. Internally, how is Union Systems putting these aspirations into practice among its workforce?

We have been more intentional in our recruitment of more women across departments and levels in the organization to improve our team dynamics.

We have women in both senior and middle-level management at Union Systems. One of our recruitment focus is to add more female developers to our development team.

Big Data, and blockchain are big issues of the day with many promised benefits for businesses and governments in Africa. However, unlike mobile payments and phones, the benefits are not immediately clear to the man on the street or most executives and government functionaries for that matter. What is your assessment of the opportunity and what role would Union Systems play in helping clients seize it?

Big data and blockchain are very strategic technologies which like you said may seem vague to an average man on the street. Big data refers to data that is too large, complex, and grows exponentially that the traditional relational database management systems cannot process. Social media data is a relatable example of big data. Blockchain on the other hand is a distributed ledger that is highly decentralized with heavy-duty encryption and used for the exchange of value like money, securities, intellectual property, etc. I love this description by MIT Technology Review, “The whole point of using a blockchain is to let people, in particular, people who don’t trust one another share valuable data in a secure, tamperproof way.” This does not imply that asides from blockchain there are no other ways people can do business securely, however, blockchain presents a new world order.

Like any innovative technology, there are lots of benefits to big data and blockchain. With big data, companies can analyze consumer patterns and make inferences which helps them improve customer service, efficiency and make better decisions. The use case for Blockchain especially in International trade which is where we operate is evident. Blockchain can be applied in enterprise applications such as Supply chain finance, international trade finance, FX settlement, KYC to mention a few. Blockchain is being positioned to be the new frontier for the facilitation of trade finance among trade stakeholders promoting transparency, paperless trade, and fraud mitigation and we are aligning ourselves as a company to lead this movement in Africa.

As we enter the second quarter of 2021 with a barely-there recovery from the country’s second recession in 4 years and the second COVID-19 wave, is there room for optimism? What is your outlook for the rest of the year?

There is room for optimism especially in our industry which has beenrecording growth because more companies have begun to prioritize automation. We also hope that the strides being recorded with the vaccines will ease the burden of the pandemic globally.

For us as a company, this is an exciting year because we have mind-blowing products we will be releasing during the year. We are also actively hiring and expanding our staff strength as we anticipate growth this year.

Tuesday 20 April 2021

BUSINESS DAY

19

INTERVIEW More stolen vehicles can be recovered in Nigeria if states collaborate – Kilanko LAPE KILANKO, general manager, Motor Vehicle Administration Agency (MVAA), Lagos State, has been in the state’s civil service for 22years. She spoke with CALEB OJEWALE, on the agency’s strides in contributing to internally generated revenue, and a recently re-introduced Temporary Vehicle Tag for every vehicle passing through Lagos. Excerpts:

C

an you give us an insight into what the numbers look like in terms of vehicle registration in Lagos state in the last

if anybody comes here to change ownership, we can now say, no, this vehicle is stolen.

There are things people take granted, which could make recovery of stolen vehicles difficult too. Like when you change the colour of your car, you are supposed to notify us that the colour of your car is no more blue, it is red. Because when we are looking for stolen vehicle, we look for a blue car, for instance, not red. To change the colour of your car, in some countries you must take permission, because the record they have is now different. We also have change of engines people do and not notify us.

We just appeal to people that things concerning vehicle identification should not be taken for granted.

Every little detail is very important because you don’t know when it will come handy any day.

Often time, one sees a car with California, Texas number plate... [cuts in]

5 years?

It has been increasing so far, and this year, we expect new registrations to be over 400,000. Of course, those that will renew will be over that number, more and above that number. I can’t give you the exact number because it keeps increasing and I don’t want to over-quote or under-quote.

IGR is one of the strong points of Lagos state, what has this agency’s contribution been?

Last year our revenue target was about N8.5billion and this year it is to be N11billion.

Did last year exceed your projections?

Because of COVID we couldn’t meet the original target. It was really more than that but you know the budget was readjusted. So our target was reduced to N8.5 billion and we were able to make about 85% of it.

Can you speak to some of the areas you are looking to innovate in order to bolster revenues by your agency?

There is what we call Temporary Vehicle Tag. It was re-launched early this year, and this has to do with vehicles coming into Lagos or passing through Lagos. There is a law in the transport section, which says that, “no vehicle must ply the road without any form of identification on it”.

And we know the purpose of having identification on an item, which is so you can pin that particular item to an individual.

However, when a vehicle is newly acquired, and you want to ply the road, in order to meet that law, we have devised a product called temporary vehicle tag. It is a tag that you can use on your vehicle before you do proper registration. And we’re taking it right from the points of entry into Lagos; it could be the port, it could be the border. But for now we’re doing the port.

As long as you’re passing through Lagos, you must get that tag, and it has the name of the importer on it and the Vehicle Identification Number (VIN).

This ensures whenever history of that vehicle is being traced, it can be done right to the importer, and which is a plus considering security issues we’re having in the country. Therefore, because we are re-launching this service, which was not done last year, it will be another source of revenue.

Of course, all the other products are still there. We’ll look at where we

Lape Kilanko

close leakages, we’ll look at automations which will increase our service, delivery, brings about transparency and all that. When you automate, so many people can do so many things without really coming to your office.

And of course, it will increase your efficiency. All these things will bring about increase in revenue that we are after. Then we also have the regular vehicle registration services. I should also state it is good for people to find out if the number plate they are given is genuine or fake one.

Are you considering automation for vehicle registration anytime soon, perhaps an online system?

Last year we did online registrations for renewal, and we have a privatepublic partnership on that. We are still working on a system where you can renew on your own from the comfort of your home or office. However, in vehicle documentation, there are certain things you cannot do without coming over to the station.

It can’t be total automation. There are certain things that you still have to come over and do.

Can you speak to some of the other challenges you’ve noticed in the administration of vehicle registration in Lagos and more importantly, how do you think we can solve them?

An example is change of ownership.

We don’t have access to other states and we have people from other states requesting that they want to buy our own number plates in Lagos state.

They have bought a vehicle and there’s need to change the ownership. Because the first registration is

not from Lagos State, we don’t have access to verify the history of that vehicle.

Therefore, when they come to Lagos for change of ownership, we can’t do it, at least until they have done the change of ownership in that other state. Then they can now come and do their registration with us. This is one of the things states need to come together to fix. To some extent, Lagos can still do some of those registrations because our consultant covers about 22 states, and information pertaining to any of those states can be accessed for ownership verification. If more states can come into this type of net, then things like change of ownership will be much more easier.

This is more important now considering not many people can buy new vehicles. It is more of Nigerian used vehicles that we are having, and this will assist us in the process of change of ownership. In the process of doing this, we have discovered and recovered vehicles that are stolen.

Because in doing change of ownership, we call the first owner: have you sold your vehicle to this person? They say, which vehicle? The vehicle that was stolen 3 years ago!

We can recover more stolen vehicles if we get more collaborations with more states and we’re connected, then we will be able to do more in that area.

What can the average owner do to make sure it is impossible for someone else to register a stolen vehicle?

What you should do is first report to the police. You now write to us giving the particulars of your vehicle and what we will do is to flag it so that

It is not allowed. They are not supposed to ply the road with that kind of number. If that California numbered car should commit an offence, how will you trace the owner?

Over the years people have had this belief that when you import a car, you’re allowed to use it for a limited period until registration No. That’s a wrong perception. If you’re not ready to do proper registration, then do this (temporary registration) for one month. Then renewable for another one month.

What’s the cost for getting this temporary registration?

N3,000.

If a person brings in a car through Lagos ports, for use in Kano for instance, will other states reckon with this temporary vehicle registration from Lagos?

It is not Lagos per se; just that we are taking the lead to say this is what we want. I referenced the national transport law earlier, forbidding driving vehicles without registration. And because you have not done the permanent registration, that serves as an identification on that vehicle for you.

If one does it and they stop him in Okene, on his way to Abuja where he intends to register, does this cover him?

This should cover him because that is his form of temporary registration.

You know, other states may not be too willing to start. But for this, we have told the Commissioner of Police, that this is starting and we are all doing it

together, which I guess they should be able to pass to other states. What we are doing, other states also have that right to do it, because it is a national law. And there are so many things that people are not doing. You see even within Lagos, you see a lot of cars being driven without any form of identity.

On a government to government basis, what is going to be the level of engagement to ensure that other states will embrace this, so that end users from Lagos, for instance, will not be harassed on the road or possibly even extorted that oh, ‘we don’t know what you’re holding’.

When they see Lagos doing it, other states will wake up and say this is good. Our road safety is even aware of it and can use its federal might to get other states to buy into it. We are all working for the good of everybody.

If Lagos is doing it and other states emulate it, the security issues will be improved. Of course, you know Lagos State is always taking the lead in so many things. Recently, people from Kwara state came and were asking us what we were doing and how we can collaborate. With the TVT that we’re starting now, the ripple effect will be felt.

What should be the standard cost of either registering a new vehicle or renewal in Lagos State?

It depends on capacity of the car, it’s the capacity that determines some costs. But the number plate has a fixed price on that.

What’s the fixed cost on the number plate?

That costs N12,500 apart from other documents such as going to our sister agency for road worthiness.

People often mention different amounts as cost of car registration in Lagos, why is this?

If you come to the station, you’ll get a fee. If you’re going through intermediary, you’ll get a different fee because the intermediary is going to add his own cost to it. Therefore, you can’t get the same cost. If someone is supposed to do the running around for you, for their efforts they add some amount. There are some people we call client representatives who do this, and are going to add their own cost, which you don’t have power over.

Is it possible to do car registration without going through intermediaries?

That is why you have our stations. You can go inside the station and for our services we have over 112 stations.

20

Tuesday 20 April 2021

BUSINESS DAY

ICTTALK Innovation

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Airtel beats MTN, others to fastest, consistent mobile operator in Nigeria FRANK ELEANYA

A Nigeria lags behind Cameroon, Senegal, Ghana on internet speed FRANK ELEANYA

N

igeria is now ranked 103rd for mobile and 146th for fixed broadband on the monthly Speedtest Global Index, behind peers in West Africa such as Cameroon, Senegal, Ivory Coast, and Liberia.

For mobile Internet speed, the index showed Nigeria lagging behind Cameroon with 16 percentage points.

Ranked 87 in the world, Cameroon has the fourth fastest Internet speed in Africa, behind South Africa (51); Morocco (60); and Tunisia (75). Another West African country ahead of Nigeria in mobile broadband is Senegal ranked 100th, and 10th in Africa.

Nigeria is also behind peers in West Africa in fixed broadband speed. With a paltry 14.92Mbps, Nigeria is ranked 146 in the world out

of 177 countries and falls behind West African peers like Ghana, Ivory Coast, Senegal, Cape Verde, Gabon, Western Sahara, Mali, and Liberia.

Adriane Blum, Vice President, Marketing and Communications, Ookla, says factors that can increase the speed of a network vary widely, but a primary one is investments in infrastructure and network optimization from operators.

“Other factors at t h e n e t w o rk l e ve l (e. g. geographical considerations, network congestion, etc) and at the personal level (e.g. what devices are being used to connect to a network, number of people trying to use a network for high bandwidth at a single time, etc) also contribute heavily,” Blum said in a note to BusinessDay. Ghana has the fastest fibre broadband internet in Africa with 47.89Mbps and ranked 77th in Ghana.

Following closely is another

West African country, Ivory Coast with 47.77Mbps and ranked 78th in the world.

“I used to leave South Africa and come to Ghana to work because the Internet in South Africa was worse than Ghana,” said Victor Asemota, founder of SwiftCorp.

Other countries in Africa above Nigeria include South Africa (88); Egypt (94); Senegal (101); Madagascar (103); Seychelles (107); Morocco (112); Cape Verde (119); Kenya (125); Gabon (126); Western Sahara (127); Mali (128); Togo (131); Mauritius (133); Tanzania (134); Rwanda (135); Namibia (139); Djibouti (138); Liberia (139); Libya (140); Somalia (141); and Lesotho (143).

Although no Afr ican country is yet to reach the global average of 98.67Mbps, Nigeria at 14Mbps is barely 15 percent, indicating the country is way off the track in providing high speed internet to its citizens. Nigeria

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currently has the largest number of active Internet users in Africa with about 97 million subscribers.

The deployment of fibre Internet infrastructure in Nigeria has stalled to less than 1 percent of investments in the telecommunication sector. The fastest fixed broadband provider in the country, ipNX only scores an Internet speed of 18.00Mbps and lacks presence in many parts of the country.

Blum says delivering faster speeds across the country is a function of States and other government bodies collaborating with operators in service in different ways.

“But one is investing in broadband mapping to reveal where internet accessibility is and is not available.

Ma k i ng i nve s t m e nt s t o help underser ved areas receive internet access at the government level can go a long way to bridging the digital divide,” she said.

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irtel was the fastest mobile operator among the top network providers in Nigeria in the first three months of 2021, according to the latest Speedtest Intelligence data from Ookla.

The second-largest internet provider in Nigeria beat competition from MTN, Globacom, and 9Mobile with a speed score of 27.18 on modern chipsets.

Being the fastest network operator in Nigeria also meant that Airtel had the lowest delay or latency at 39 milliseconds (ms) within the period.

The telecom operator also beat the other networks on Consistency Score. Mobile Consistency Score measures the number of incidences (viewed as a percentage) of a provider’s samples equal or exceeds both a download threshold of 5 Mbps and an upload threshold of 1 Mbps.

In the first quarter of 2021, Airtel had the highest Consistency Score in Nigeria with 84.7 percent of results showing at least a 5 Mbps minimum download speed and 1 Mbps minimum upload speed.

H o w e v e r, m o b i l e subscribers needed to have an iPhone 12 Pro Max 5G to fully maximise the speed advantage Airtel or MTN which is the second fastest has on offer.

O o k l a’s a n a l y s i s o f performance on some of the fastest phones in Nigeria demonstrated the iPhone 12 Pro Max 5G showed the fastest mean download speed during Q1 2021 with 36.01 Mbps.

The price of an iPhone 1 2 P ro Ma x o n Ju m ia,

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Nigeria’s largest e-commerce platform, is N619,999. And given that Apple has about 6 percent of the mobile devices market in Nigeria, it is highly unlikely that the Airtel speed is accessible to many mobile subscribers in the country.

In other words, millions of subscribers who are limited by less expensive smartphones still struggle with Internet speed.

The Ookla report in

examining the percentage of an operator’s known locations where a device has access to 4G LTE, also found that MTN has the best 4G availability in Nigeria.

At the same time, mobile subscribers are more likely to download documents faster in Port Harcourt than they would in any other city in Nigeria. The data found that Port Harcourt showed the fastest mean mobile download speed among Nigeria’s most populous cities during Q1 2021 at 23.02 Mbps.

Tuesday 20 April 2021

BUSINESS DAY

21

PROPERTY&LIFESTYLE Foreign investors seeking residency in US to pay more for EB-5 visa … but the benefits are fulfilling, encouraging

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igerians and other foreign investors seeking permanent residency in the United States using the EB-5 Visa have to pay more as the visa or green card is now given to those who invest, at least, $900,000.

This amount, which is a 40 percent increase from $500,000 it used to be, must be invested in a job-creating US enterprise that creates or sustains at least 10 US jobs, either directly or indirectly, over a two-year period.

The good news, however, is that once this is achieved, investors and their immediate family members will receive an unconditional green card, which grants them legal permanent residency in the US. Besides, the benefits of making this investment are not only rewarding, but also encouraging. Some of the benefits are investors’ family members, including spouse and unmarried children under the age of 21, also receive green cards.

The investors and their families have the freedom to live, work and retire anywhere they choose in the United States. There is no requirement to live near the site of investment just as investors are not responsible for the day-to-day management of

A look at ISO 41001: The new standard for FM (part 2)

W the commercial enterprise.

It does not matter from where the investment capital comes. It can come from any lawful source, including gifts, inheritances, and business ownership. Investors with EB-5 Green Cards may travel outside of the United States and return without a visa.

Investors enjoy the same benefits as other US residents and these include resident discount on tuition to attend US colleges and universities and free public-school system. They may apply for full US citizenship after five years.

To aid Nigerian investors interested in the EB-5 Visa, a Nigerian real estate firm, 3Invest, working in partnership

with Houston EB-5, has introduced Moderno Porcelain Works in which investment could be made to achieve the US residency.

Moderno, according to Ruth Obih, CEO, 3Invest, is currently the fastest-growing company in the real estate industry and a nationally recognized surfacing company, specializing in luxurious, large format porcelain surfacing.

BusinessDay gathered that the company has established operational centers in industrial areas just outside the metropolitan areas that are designated enterprising areas (TEAs), with locations in Texas, Florida, Minnesota, and California.

“Moderno is an operational business which allows for fewer investors to reach the capital investment amount resulting in a quicker project start time as against that of large real estate development,” Obih explained.

She added that an operational business with strong underlying fundamentals like Moderno Porcelain Works can also offer an investment payment plan to address the increase in investment requirements under the new law.

“EB-5 Investors will invest to establish new operational centers (HUBs) in major metropolitan areas backed by a strong corporate network,” Obih said.

Here’s what new report says about global wealth, property amid COVID-19

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lobal wealth has remained firm despite the Covid-19, Knight Frank Wealth Report has shown, noting that, globally, ultra high net worth individuals’ (UHNWI) numbers grew by 2.4 percent in 2020.

The report, which is a global perspective on prime property and investment, provides accurate and expert analysis of the fortunes of UHNWIs, pointing out where they spend time, what they invest in and what they are likely to do next.

“From policymakers to investors, a lack of insight into the behaviour and attitudes of the UNHNIs, who represent just 1 percent of global population, risks a serious misreading of economic trends,” the report notes.

Though the 2.4 percent growth in the number of the

Infrastructure Maintenance With TUNDE OBILEYE

UHNWIs was just one-third of the rate of growth seen in 2019, Knight Frank still hails the growth, saying it was still not what they would have predicted in the first half of the year, given the impact of the virus.

“In 2020, we may have seen a temporary exodus from cities during the initial round of Covid-19 lockdowns.

80 percent of global GDP is generated in cities. Cities go through transformations – there are declines and then there are recoveries. There are epochs when cities lose ground and epochs when they gain ground,” the report says.

Prime residential prices performed better than expected in 2020. The key trends that shaped prime residential prices in 2020 included demand which was domestic in nature, a changing tax landscape, 2020 wasn’t 2008, buyers sought green space. www.businessday.ng

But Asia bucked the trend— wellness and wellbeing were ever more relevant, education a key driver of demand, etc.

From master-planning entire communities to interior design, Covid-19 is reshaping the way developers, architects and designers are looking at people’s homes and the environments around them.

The report hints that 26 percent of UHNWIs are planning to buy a new home in 2021, citing respondents to this year’s Attitudes Survey. Private capital was undeterred by the Covid-19 pandemic and continued to invest in commercial real estate during 2020.

48 percent of family offices have reassessed their attitudes to succession planning during the Covid-19 pandemic. 48 percent also said the younger generation have different attitudes towards property. 38 percent of family offices are

looking to purchase commercial real estate in 2021.

Despite the pandemic, the office sector remains a popular investment choice for now, still contributing around 35 percent of global real estate investment volumes in 2020, based on provisional data from RCA. The life sciences arena is rapidly growing and evolving.

As life sciences continue to grow, the report predicts the clustering tendency of the sector will amplify, particularly benefiting innovation-led cities. For the private investor, this provides a wealth of new opportunity.

Experts from across the Knight Frank network highlight alternative real estate opportunities that could be of interest to private investors.

Some projects include farming carbon, older offices, park life and mass media.

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ith the publication of the 41000 series and the adoption of the 41001 standards in Nigeria by the National Mirror Committee, the elevation of the practice of facility management (FM) is well.

The standards is truly on its way to ensure that the FM industry is seen more than just a cost center and that there is more to it than contract management and delivery.

The aim of these standards is to have a global consistency in the delivery of FM, harmonizing the specifications and management from whatever start point, therefore making FM a strategic management discipline. It’s been a long road of painstaking work to get to this point.

The economic and social benefits of ISO 41001 will be considerate in terms of raising the standards and ensuring faculty management practitioners achieve higher levels of efficiency.

In this article, I want to highlight more benefits of ISO 41001.

Communication: ISO 41001 provides a framework for organizations to develop a robust plan for internal and external communications relevant to FM system including what information to communicate, when to communicate, why the information needs to be communicated, with whom to communicate, how to communicate and how to @Businessdayng

monitor the effectiveness of the communication.

This is because of the wide scope of services, different types of locations and various interested parties involved particularly in times of crisis such as the covid-19 pandemic we are experiencing today.

Continual Improvement: ISO 41001 outlines a process for periodic planned management reviews of the FM systems by top-level management of an organization which ensures continuing suitability, adequacy and effectiveness.

Continuous review of changes in risk profile, service delivery options or methodologies will inform the planning process and provide up-to-date information regarding the FM performance being delivered.

As we all know, nothing is fail-safe. However, the chance is that facility management practitioners and organizations implementing the ISO 41000 series will be in a better position than others.

The agility and willingness on all stakeholders to transform will hold the profession and society in good stead as we look forward to the time when we emerge from the current global disruptions and restructuring of our built environment.

Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com

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Tuesday 20 April 2021

BUSINESS DAY

Media business Nigerian outdoor firm, Loatsad thinks big, plans expansion to other African countries Daniel Obi

T

he management of Loatsad Promomedia Limited, a Nigerian outdoor advertising firm is thinking big as it is focusing on turning the young company to a multinational firm with headquarters in Lagos.

The firm which made a statement in the Nigerian market in late 2019 with the acquisition of E-motion advertising limited and has since then been deploying digital LED screens to portray brand messages and proffer optimum value in the marketing space, intends to expand into other African counties such as Ghana, Zambia, Rwanda among others after it must have firstly chart a strong path here in Nigeria.

“Our goal is expansion into some other African countries.

But we will first accomplish our goal at home before we start moving to other countries. When we have gotten to the level we want in Nigeria, Ghana and others are some of the countries we are looking at”, Seyi Tinubu the Chairman of the company told BusinessDay recently.

Since it started operation, the company has taken outdoor advertising to a higher standard with its all LED boards, this is evident with the upgrade of some of the existing static structures it inherited from E-motion into bigger and better structures to add life to brand campaigns and to provide maximum value for clients advertising spend.

Seyi Tinubu said the management which is utilizing new technologies in its service of-

fering to drive engagement is building an enduring organisation that will outlive generations. He commended the Loatsad Promomedia staff for all the great jobs executed by the company and also attributing the company’s growth to the tireless effort of his partner Adenrele Olusoga and members of the team. .

Seyi, who is the son of Bola Ahmed Tinubu, the national leader of the All Progressives Congress APC dissociated the influence of his father to the success of the Loatsad. “I get saddened when people associate everything I do to the influence of my father. I have to eke my life and my parents told us that education is all they will give us and you have to make your self”.

Seyi who frowned at insinuations that he uses his fa-

ther’s name to influence sites for bill boards narrated how he went into advertising. He said before he ventured into advertising, he went through a bunch of different opportunities with his partner, Adenrele Olusoga.

Explaining on where the seed money for the advertising business came from, the advertiser who said Loatsad Promomedia operates in 10 states of Nigeria said there are multiple companies he operates with his partner. “We have to clear our savings. If you have a goal and focus, you have to do all to achieve it. You must start to save and plan for it, you will achieve it.

There are sacrifices you have to make but ultimately, you will achieve it. We were able to plan and have financial plan that allowed us to maintain

our focus”.

Speaking on corporate social responsibility, Seyi said Loatsad Promomedia has spent over N100 million on community support.

This includes; Recreating Modernizing Anuoluwapo Seafood Market Falomo and handing it over without collecting a dime, partnering other organizations like Food Clique to provide food stuff for more than 70,000 homes during Covid-19, and providing scholarships for many dropout children and employing tutors to teach them after school, helping small businesses with financial and technical support, money to some families, feeding of some schools and communities and ongoing food distribution in collaboration with Food Clique and PepsiCo.

Mohammed G. Nasreddin, managing director, Fraser Suites Abuja, and Hassan Usman, managing director/chief executive officer, Jaiz Bank during the official deployment of NQR code by the bank to the Fraser Suites Hotel in Abuja.

Mandilas upskills technicians to cope with air-conditioning latest technology, installation, and maintenance andilas Group, a multi-sector organization that provides lifestyle solutions such as mobility and cooling sales and aftersales services including Carrier airconditioners has commenced a series of training for Nigerian technicians with specialty in air-conditioning units to upgrade their knowledge and skills in view of emerging technologies and innovations.

The series of nationwide training which began last weekend with the Nigeria Association of Refrigerator and Air-conditioner Practitioners NARAP, Lagos State chapter was principally designed to upskill technicians to meet the standard of installation, repairs, and maintenance of air-conditioners in the residential sector to ensure excellent delivery of services to all customers of the group.

“Mandilas Group focuses more on research and development to find the best technology in order to ensure that Carrier Air-conditioners are sustainable, but the product can only be sustained if the installation and maintenance are well handled”, Pal Singh, General Manager of the Cooling Division of Mandilas Group said at the training session.

He said it is important that the technicians upgrade their knowledge because Mandilas has the latest technology and new type of machines which are completely innovative in the Nigerian market.

According to him, most technicians in the country are working on old machines and therefore they need to upgrade their knowledge to be able to cope up with the new technology. He said when the machines are properly in-

stalled, there will not be water or gas leakages which allow consumers to enjoy the units.

The General Manager described Carrier Air-Conditioners as high end in terms of performance as materials used are of high quality but said “when you are looking at the cost of our products, they are affordable when compared to other brands”.

Assessing the air-conditioning market, he said “there are brands that are basic level brands, which use basic manufacturing materials and have basic level of technology.

There are also mid-level and top brands. Carrier is a top-quality brand made with highest quality materials and compressor that can work with low voltage”.

Speaking on the training, Alex Okelola, Deputy Co-ordinator and Adekunle Badiri, State Secretary of Nigerian Association of Refrigeration and Air-conditioning Practitioners, NARAP Lagos State Chapter, an association formed in 1993 commended Mandilas for the training. He said it afforded his members the opportunity to learn modern technology.

He advised consumers to always employ the services of technicians who belong to associations as most of them have gone through trainings organised by local and international bodies.

Also speaking at the training session, Kenneth Nwauzoma, Head of Sales for Carrier Residential Airconditioning, Mandilas said what customers value is peace of mind after purchase.

“We have a robust after sales solution strategy to cater to all customer needs. This training which is in collaboration with the technicians is to obviate future problems associated with installation, repair and maintenance of air conditioning units”.

all persons it is a known fact that the clothes , shoes and hair style of many ordinary are copied from celebrities featured in advertisement or pictures in fashion magazine.

Many at times the celebrity the ordinary person is trying to copy may not even be a regular user of these product or brand but the mere association of the public figure with the brand would make many people want to aspire to getting one of the products for themselves just to be like the public icon.

The dissatisfaction or unhappiness comes from the inability to move from aspiration to actual

purchase or usage . Meanwhile the ad man is daily improving his trade to make his message convincing and irresistible and the poor user is trap in this world of make believe. The users have been trapped in this sub reality world and they may there for some time to come. Kindly share your thoughts on how admen and their craft have affected the way we relate with the world and create our own reality.

Michael Umogun writes from the Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN)

Daniel Obi

M

BD Brand Talk

Admen and the recreation of our reality?

Mike Umogun

D

oes advertisement make us Unhappy ?

This was the question Professor Andrew Oswald asked 900,000 respondents in 27 European countries for 30 good years . Advertisements make us want what we don’t or can’t have the idea here is a very old one. Before I can decide how happy I am , I have to look over my shoulder , consciously or subconsciously and see how other people are doing.

Many of my feeling about my income my car and my house are molded by my next-door neighbor’s income, car and, house . That’s just part of being human ;worrying about relative status. Every human would naturally aspire to greater things even the richest of the rich thinks this way.

A good advertisement is supposed to create aspiration , a desire to have something which at times we cannot have because our budget or financials situation cannot meet up. But we know from lot of marketing research that making social comparisons can be harmwww.businessday.ng

ful to us emotionally and advertising prompts us to measure ourself against other .if I see an advertisement for a fancy new car ,it makes me think about my ordinary one , which might make me feel bad and wonder if I am making reasonable progress the reality of my situation considered.

If I see N100,000 watch and can accommodate the expenditure but if I then look at my watch , which I probably paid about N15, 000 for, I might think ,’’Maybe there’s something wrong with me .’’ And of course nation are just agglomeration of individual. So if we say

advertisement makes us unhappy then we can also agree that advertisement can also makes liars .

Many at times when we interview users of toothpaste in the bottom of the social pyramid , they would claim they are user of Brand X which is popular and respected in Nigeria instead of acknowledging the Chinese Brand Y that they are currently using . We justify this anormal by invoking the respondent’s inspirational persona. But is this correct? Let’s keep the answer to this question for another day and article.

While this may not be true of

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@Businessdayng

A

Tuesday 20 April 2021

BUSINESS DAY

Harvard Business Review

23

MANAGEMENTDIGEST

Does your definition of leadership exclude women of color?

MARLETTE JACKSON

E

arlier this year, Kamala Harris took the oath of vice president and stepped into one of the most powerful jobs in the world, marking a historic moment in our nation’s conception of leadership. As the face and style of leadership changes on the national stage, the pressure for corporate leadership to follow suit will only continue to mount. Although organizations have promised to “do better,” many have also struggled to identify where to begin. It’s an understandable problem. Dismantling systemic racism and sexism can feel like a daunting, overwhelming endeavor — these issues are deep and pervasive, and they’re much bigger than any one organization.

Still, companies have no choice but to reconsider the policies, processes and cultural norms that have perpetuated systemic inequalities. If you want to change who ends up at the top of your organizational chart, reevaluating the skills and values that shape your hiring and promotion process is an essential first step.

As practitioners and consultants of diversity and inclusion, we’ve seen how narrow perceptions of leadership and “fit” can reinforce the status quo.

As women of color, we’ve experienced firsthand how these systemic inequalities can take a toll. But we’ve also learned how leaders can be proactive in ensuring that how they define leadership doesn’t circumvent marginalized groups. Here, we discuss how our current ideas of leadership often ignore the value underrepresented groups bring to business, how to adjust our systems to recognize those contributions and tactical steps to make progress toward systemic change. This doesn’t mean getting rid of what works — it just means expanding our definition of who “fits.”

TRADITIONAL LEADERSHIP CRITERIA LEAVE QUALIFIED PEOPLE BEHIND. The first step is to recognize that our systems — how we hire, why we promote — are optimized to value and advance a certain archetype. While the generic image

of a leader can vary based on the level of management we’re discussing, the industry in question and the demographic distribution of the field, models of leadership in the U.S. tend to be Eurocentric, favor Western thought and center on straight, white men. The attributes companies often look for in leaders, such as competitive, dominant, objective, self-confident, aggressive and ambitious, are overwhelmingly masculine.

This leaves women of color, or WOC, at a double disadvantage: They often don’t fit companies’ measures for leadership, because those measures were developed for someone else.

This status quo in business culture has real and tangible effects on WOC: Native American women suffer from one of the largest pay gaps, Black candidates are more likely to be rated as unprofessional when they don Afrocentric versus Eurocentric hair, employers are less likely to hire a Middle Eastern woman who wears a headscarf, Latina women are twice as likely (compared to non-Hispanic white women) to say they must work twice as hard as their co-workers because of their cultural background and Asian American women are often considered less fit for leadership than white women.

Changing how your organization thinks about hiring and promoting doesn’t mean reinventing the wheel, however. There’s a wealth of academic scholarship to lean on. We often refer to Dr. Tara

J. Yosso’s model of community cultural wealth, which highlights the cultural capital, or “array of cultural knowledge, skills, abilities and contacts possessed by socially marginalized groups that often go unrecognized and unacknowledged.” Organizations can apply this model to WOC in the workplace to recognize how the various forms of cultural capital WOC bring directly affect the bottom line. Here’s how companies can consider these strengths in hiring, advancement and leadership decisions.

RECRUITING & HIRING RESISTANCE CAPITAL refers to the skills communities of color acquire through actively challenging inequality and oppressive systems. Coming from a legacy of opposition gives WOC the fortitude to shake up the status quo and improve conventional processes that may be hindering a company’s growth. Given that factors like institution type are uncorrelated with workplace engagement and well-being, it’s time we question the proxies many companies have used to measure success.

PROMOTIONS & ADVANCEMENT NAVIGATIONAL CAPITAL refers to the skills acquired through maneuvering social institutions that weren’t built with communities of color in mind. This form of cultural capital translates well into WOC’s ability to navigate tough corporate environments and relay

that information to the next generation — increasing the retention of underrepresented talent. For many WOC, navigating corporate spaces is challenging, especially as it relates to promotions and advancement. Whether it be a result of double standards, microaggressions and/or stereotypes, research has shown that women of color get less support at work, and Black women in particular are less likely to be promoted.

INTERPERSONAL RELATIONSHIPS & CULTURE LINGUISTIC CAPITAL refers to the intellectual and communication skills one gains from communicating in various languages and cultures. Employees who make the most of their linguistic capital in the workplace are a huge asset, as research shows that thinking in a foreign language reduces decision biases. Furthermore, linguistic diversity enhances companies’ abilities to market to diverse communities and conduct international business. However, despite the booming market for bilingual speakers, monolingual workers are more likely to hold higherranking jobs than bilingual workers with similar education and experience. Examples like these underscore the need for companies to rethink their leadership criteria and reevaluate the use of foreign languages in international business and domestic boardrooms.

STRATEGIES: OPERATIONAL-

IZING A NEW MODEL OF LEADERSHIP Redefining leadership requires expanding the archetypes that organizations value. The assets WOC bring to managing teams, projects and cultures are rich, and by shifting the paradigm of leadership to include WOC, we can reward the WOC driving productivity and innovation. Here’s how we can start: — ADJUST EVALUATION CRITERIA FOR HIRING AND PROMOTIONS: Consider adding these forms of capital when assessing candidates for hiring and promotions.

— PROVIDE RESOURCES FOR A WIDER VARIETY OF LEADERSHIP DEVELOPMENT: Just as we provide leadership development resources to improve technical or communication skills, we need to support the development of leadership qualities that value nontraditional, more inclusive leadership archetypes.

Expanding our notion of leadership is a critical part of seeing greater representation in senior positions. Adjusting our systems to reflect the cultural capital of broader groups is an essential first step in dismantling racism and sexism at the top. This work requires structural change, cultural shifts and rewarding the brilliance and resilience of women of color.

Marlette Jackson is a scholar, practitioner and consultant of equity and social justice. Paria Rajai is the CEO of ModelExpand.

24

Tuesday 20 April 2021

BUSINESS DAY

ENERGY INTELLIGENCE OIL

GAS

PETROCHEMICALS

POWER

Nigeria may face political instability after global energy transition - report DIPO OLADEHINDE

N

igeria, Algeria, Chad, and Iraq will be among the first countries to experience political instability as oil producers feel the effects of a transition to low carbon energy production, according to a new report from global risk consultancy Verisk Maplecroft.

With the move away from fossil fuels set to accelerate over the next three to 20 years, and the COVID- pandemic eating into short-term gains in oil export revenues made in recent years, Maplecroft warned that oil-dependent countries failing to adapt risk sharp changes in credit risk, policy and regulation.

The firm cautioned that countries that had failed to diversify their economies away from fossil fuel exports faced a “slow-motion wave of political instability.”

“Our data pinpoints Iraq, Nigeria and Algeria as first in line to face a slowmotion tsunami of political instability over the next 3-20 years,” Verisk Maplecroft, a research firm specialising in global risk analytics said in its latest 2021 Political Risk Outlook.

Nigeria, Africa’s largest economy, relies on crude

sales for around 90percent of its foreign exchange earnings and has devalued its naira currency twice since March last year. The International Monetary Fund (IMF) last month urged the country’s central bank to devalue once again, but met with resistance.

Verisk Maplecroft re-

searchers suggested that recent currency devaluations were a “harbinger of the bleak options” ahead for oil-producing countries, who will have to either diversify or face forced economic adjustments.

“Many, if not a majority, of net oil producers are going to struggle with diversification

Why millions of electric vehicles may face production delays DIPO OLADEHINDE

T

he global market share of electric vehicles is set to rise so quickly that battery manufacturers will not be able to meet production requirements from 2027, a Rystad Energy analysis has shown.

The reason is that mining capacity of lithium, a key ingredient in Electric Vehicles -purposed batteries will fall short of demand, unless investments in new mines accelerate.

According to Rystad Energy, today’s lithium mining capacity can comfortably satisfy current EV market demand, but as demand increases Rystad predicts a “serious lithium supply deficit” starting from 2027.

Tesla’s Elon Musk has already flagged a delay in the Tesla truck because of the potential shortage of battery cells.

“Under the current pipeline, capacity deficits could triple lithium prices towards the end of this decade,” Norwegian independent energy research group Rystad Energy

said.

The report said that today’s lithium mining capacity can comfortably satisfy demand from the electric vehicle market,however, the fast rise of electric vehicles is set to create a serious lithium supply deficit already from 2027.

Rystad Energy estimates that the supply deficit is poised to delay the production of the equivalent of around 3.3 million electric vehicles with a battery of 75 kilowatt-hours (kWh) already in 2027. “The impact will grow quickly, to around 9 million EVs in 2028 and some 20 million electric cars in 2030.”

The research firm explained that the imbalance will grow larger as the years pass and “is set to cause delays for the production of millions of electric passenger cars, even when planned new mining projects add their capacity in coming years.

More investment decisions to build new lithium mining projects need to be added to the pipeline, and fast, as Rystad Energy estimates it can take between five and seven years

to develop, finance and build an average new project.

“A major disruption is brewing for electric vehicle manufacturers. Although there is plenty of lithium to mine in the ground, the existing and planned projects will not be enough to meet demand for the metal. If more mining projects are not added to the pipeline quickly, the energy transition of road transport may need to slow down,” says James Ley, Senior Vice President at Rystad Energy’s Energy Metals team.

In addition to electric passenger vehicles, the expected lithium mining capacity deficits will also disrupt the production lines of other vehicles that will be fully or partly electrified and need batteries, such as buses, trucks and hybrid cars.

Demand from the shipping and aviation industries, as well as grid storage, will also feel the scarcity of lithium.

Rystad Energy measures the remaining lithium production capability that can be used for manufacturing batteries of all

applications in 2021 stands at nearly 520,000 tonnes of lithium carbonate equivalent (LCE) per year.

“We anticipate that lithium prices could replicate their past turbulence if supplies cannot catch up with booming EV demand later this decade,” added Ley. LCE prices averaged around $8,200 per tonne in 2020, but in the previous five years the price fluctuated wildly, from $6,500 per tonne in 2015 to a record high of $17,000 per tonne in 2018.

This 160percent surge in pricing between 2015 and 2018 was due mainly to a rise in EV demand from China and a temporary shortage of lithium supply, which could naturally be replicated as the decade proceeds.

Rystad Energy concluded that there will not only need to be significant investment made in mining capacity, but structural changes will be necessary to make the lithium industry more sustainable, including the possibility of recycling lithium.

largely because they lack the economic and legal institutions, infrastructure and human capital needed,” said Head of Market Risk James Smith.

Analysts suggested the worst-hit countries could enter “doom loops of shrinking hydrocarbon revenues, political turmoil, and failed attempts to revive flatlining non-oil sectors.”

Since the oil price crash of 2014, most exporters have either stagnated or reversed efforts to diversify their economies, Maplecroft data highlighted, with many doubling down on production in the ensuing years in a bid to plug revenue holes.

“Despite this, the majority took a hit on their foreign exchange reserves anyway, including Saudi Arabia, which has burnt through almost half of its 2014 dollar stockpile,” the report added.

Break-even costs, the capacity to diversify and politi-

cal resilience were identified as the three key factors determining the severity of the impact on stability when the expected energy transition begins to bite.

“Currently, if countries’ external break-evens – the oil prices they need to pay for their imports – remain above what markets can offer, they have limited choices: draw down foreign exchange reserves like Saudi Arabia since 2014, or devalue their currency like Nigeria or Iraq in 2020, effectively rebalancing their imports and exports at the expense of living standards,” the report explained.

Most oil and gas exporters have “become less diverse” since the 2014-15 and 2020 oil price crashes, the analyst said.

“Even those countries we consider more capable of diversifying have lacked the political will and/or economic ability to move away from oil,” Wolf said.

Nigeria targets setting up 100 oil, gas projects by 2025 - report

A

s many as 100 oil and gas projects are set to start in Nigeria by 2025, accounting for 23 percent of all projects starts in the industry in Africa within the next five years, data and analytics company GlobalData said in a new report.

Petrochemical projects will hold the highest share of new startup projects in Nigeria through 2025, with 28 projects, followed by 25 expected upstream oil and gas projects, 24 refinery projects, and 23 midstream projects, according to GlobalData estimates.

In the upstream, some of the notable projects include the deepwater Bonga North oilfield and the onshore conventional gas Okpokunou Cluster Development. Bonga North is currently in its Front End Engineering Design (FEED) stage and is expected to start operations by 2025. Cluster Development is at a feasibility stage and is expected to begin operations by 2024, GlobalData said.

Projects in Nigeria’s refining sector will also be closely watched as the biggest African economy is eager to reduce its reliance on fuel imports, revamp its old refineries, and build new ones.

The 650,000 barrel per day Lagos I refinery is a key project

expected to start operations in 2022 and become the largest oil refinery in Africa.

“Nigeria is betting on several refinery and petrochemicals projects to meet its growing domestic demand and reduce its reliance on imports. The projects also have potential to transform Nigeria as an exporter of refined products to neighboring countries,” Teja Pappoppula, Oil & Gas Analyst at GlobalData, said.

Nigeria, Africa’s largest crude oil producer and exporter, expects to end its crudefor-fuel swap deals by 2023 when its refining capacity is set to increase with state refineries revamped and a new refinery built, Mele Kyari, Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), said in October last year. Nigerian refineries, which are in need of refurbishment, will be fully revamped and running by 2023, he added.

Back in October, Kyari said that “The outlook for Nigeria’s downstream sector looks bright with attractive market conditions, large market, significant crude distillation capacity additions from various refinery projects, improvements of the distribution network and the use of natural gas.”

EDITOR: Isaac Anyaogu / Analysts Stephen Onyekwelu, Dipo Oladehinde / Feedback: 07037817378, / email: isaac.anyaogu@businessday.ng,

Tuesday 20 April 2021

BUSINESS DAY

OFF-GRID ENERGY BUSINESS

25

in association with

When clean energy dominate tomorrow, how will Nigeria fare?

STEPHEN ONYEKWELU

I

n the race to a net-zero carbon future, clean electricity is emerging as the ultimate fuel of the future, with biofuels to fly planes, and hydrogen for energy storage. However, Nigeria’s inability to profitably generate, transmit and distribute electricity may hold it back.

Nigeria has one of the highest rates of energy poverty in the world (85 million unelectrified people) and suffers from chronic power cuts. In its recent Covid-19 economic recovery plan, the government pledged to fix its worsening energy crisis through the rapid expansion of solar power. In a shock move, it also scrapped fossil fuel subsidies. The world moves on.

The Hague-based Maarten Wetselaar, integrated gas and new energies director at Shell Global affirms positively at the Great Energy Debate 2020

Wiebe Boer, CEO, All On with Uche Oge, Chief Commercial Officer (2nd left), Aaron Esumeh, CEO (2nd right) and the Greenage Technologies team during Boer’s visit to the company’s inverter research, development, and manufacturing facility in Enugu.

that the fuel of the future is clean electricity.

“That is going to be the one that will dominate the energy systems for energy consumers. Alongside that there will be biofuels to fly planes, there will be hydrogen to store energy, but the energy that customers will use will be clean electricity. We need

to phase out oil and gas but it will not happen tomorrow.”

Five years ago, the Paris Agreement sought to strengthen the global response to the threat of climate change by keeping temperature rise this century well below 2 degrees Celsius, and above pre-industry levels and pursue efforts to limit the

temperature even further to 1.50 degrees Celsius.

To reach these ambitious goals, appropriate mobilisation and provision of financial resources, a new technology framework and enhanced capacity-building is to be put in place, thus supporting action by developing countries and the most vulnerable countries, in line with their own national objectives. The Agreement also provides for an enhanced transparency framework for action and support. Part of the deal was reduction of emission before 2050.

Nevertheless, in 2019 renewables accounted for 21 percent of Australian electricity generation. India’s energy mix for the same year was 90 percent fossil fuels, although the International Energy Agency (IEA) has predicted 8 percent drop in carbon dioxide (CO2) emission in 2020.

Additionally, the displacement of coal by gas in the last ten years in Asia has saved the world more than 500 mil-

lion tonnes of CO2, according to IEA. People familiar with the global energy systems say natural gas is to work with renewables to create a cleaner energy future.

When the sun does not shine and wind does not blow, consumers need a better backup for power, natural gas more environmentally friendly where one cannot have hydro or battery.

Wetselaar also holds that oil and gas needs to be phased out over time but that cannot happen immediately. “We need to avoid emissions, reduce emissions, and only the ones that are critically left we need to offset either by nature or carbon capture.”

Oil and gas has been central to the world’s energy system for the last 100 years but climate activism has been rising too. After years of criticism over alleged inaction, BlackRock, the world’s biggest asset manager, in January, revealed plans to put climate change at the centre of its investment process by

rolling out new Environment Social and Governance (ESG) funds, divesting some coal holdings and taking a tough line on global warming during boardroom discussions with businesses around the world.

These efforts show the world moving toward a new, cleaner energy system. “When we are flying a plane and we want to build new engines on it, we should not switch off the old ones until the new engines are really ready to take over.

And that’s going to take some time,” Wetselaar said.

The United Kingdom is planning to ban new petrol and diesel cars by 2040. Experts say it is right for governments to set the rules on this and for industry to be ready to respond. However it is important to ensure there are enough charge points, there’s enough clean electricity to charge all those cars, hopefully, there will be enough cars for consumers to continue to enjoy their mobility. Nigeria’s place in this cleaner energy future remains uncertain.

International Renewable Energy Agency, China agree on energy transition partnership ISAAC ANYAOGU

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he International Renewable Energy Agency (IRENA), and the State Grid Corporation of China (SGCC), have signed a new Memorandum of Understanding (MoU) that will see the two organisations work closely to support grid enhancements, system flexibility and sector-coupling in China and IRENA’s Clean Energy Corridor regions.

The agreement aims to advance the global energy transformation towards a net zero energy future particularly in developing countries, in the context of achiev-

ingtheParisAgreementobjectives and the UN Sustainable Development Goals.

The MoU was signed in

by Francesco La Camera, director-general of IRENA, and Xin Baoan, executive chairman of the State Grid Corporation of China.

“The coming years are critical for the energy transition,” said Francesco La Camera. “To achieve a 1.5-degree world, the global energy system must align with the necessary decarbonisation pathway this decade. What we do now will significantly impact our collective ability to achieve a net-zero future.

“In this pursuit China is a

key energy transition partner,” continued La Camera. “Under this agreement our two organisations will work closely to support the creation of an enabling environment for a future power system dominated by renewables.

This partnership represents a much-welcomed common effort towards a decarbonised global energy system.”

Under the agreement, IRENA and SGCC will conduct joint activities and collaborative studies to enhance flexible operation of power grids, decarbonisation of urban energy systems and facilitate grid development with a special focus on ap-

plication of smart grid and sector-coupling strategies.

The two organisations will also work closely at the regional and country level to build technical capacities related to the reliable integration of renewable power in developing countries.

“The installed capacity of renewables integrated to the State Grid system has reached a total of 710 GW, including 230 GW hydropower, 230 GW wind and 220 GW solar power, all topping the world,” said Xin Baoan, President of the State Grid Corporation of China.

“China pledged to peak carbon emissions by 2030

and achieve carbon neutrality by 2060,” he continued.

“SGCC released action plans that serve the achievement of these targets including establishing a new type of renewable energy dominant power system, electrifying end-use consumption and upgrading of the grid to the energy internet. We are dedicated to pioneering, promoting and leading the clean energy transition. We look forward to joining hands with IRENA and to take our cooperation to the next stage.”

According to the MoU, IRENA and SGCC will work closely across a number of key areas, including to explore

technical cooperation in the context of existing global regional initiatives, including the Paris Agreement and UN Sustainable Development Goals.

They would also conduct joint activities and collaborative studies to enhance flexible operation of power grids, decarbonisation of urban energy systems and advance technical co-operation in the context of IRENA’s Clean Energy Corridor initiatives in Africa and Central America to facilitate the grid development and interconnections with the aim to accommodate greater shares of renewable energy sources.

EDITOR: Isaac Anyaogu / Analysts Stephen Onyekwelu, Dipo Oladehinde / Feedback: 07037817378, / email: isaac.anyaogu@businessday.ng,

26

Tuesday 20 April 2021

BUSINESS DAY

Branding

Affordable Spectrum is a key driver for rapid growth of broadband connectivity – Spectranet CEO Due to the Covid 19 pandemic which is ravaging the world, there have been changes particularly in customer usage of internet. In this interview Ajay Awasthi, the CEO of Spectranet, a company that plays major role in internet delivery in Nigeria explains that there has been shift towards applications such as Online Gaming, Over-the-top (OTT) content viewing and web browsing. Each one of these growing by over 50%. He says Spectranet was quick to recognize and act on strengthening the service delivery and products to address the heightened needs for safety and reliable 24X7 internet connectivity. “Within a short period Spectranet was able to ramp up network capacity to cater to almost 30% increase in data consumption”. Excerpts.

I

t is now one year that Nigerians and the entire world were forced into a new lifestyle called the new normal, occasioned by COVID. To what extent did the new normal affect internet users in Nigeria?

We have been keenly tracking the changes in customer usage behavior over the last one year. The pandemic has really led to profound changes in the way customers consume media and entertainment (M&E), time-ofthe day data consumption habits and purchasing patterns.

We have noticed a major shift towards applications like Online Gaming, Over-the-top (OTT) content viewing and web browsing. Each one of these growing by over 50%.

Spectranet plays a major role in Internet Service delivery in Nigeria. How was the company able to adjust in managing customers’ shift in lifestyle as result of COVID 19?

COVID-19, for sure, has caused a shift in consumer behavior and some of it, I believe, is irreversible.

As a leading internet service provider (ISP), Spectranet was quick to recognize and act on strengthening the service delivery and products to address the heightened needs for safety and reliable 24X7 internet connectivity. Within a short period Spectranet was able to ramp up network capacity to cater to almost 30% increase in data consumption. In order to address a surge in night time data usage, Spectranet introduced customized data plans offering free unlimited browsing during night hours and early morning hours In keeping with COVID-19 protocols, more people work from home, thus driving Internet usage in homes, than in offices. What is the business implication of this development?

Yes, we have seen this shift in usage happening from CBD areas to residential areas. With the advent of WFH culture this shift is on expected lines and it is there to stay for a while. As an internet service provider, we needed to make significant investments to enhance data capacity in and around these residential areas. Also, our customer service footprint was expanded to provide closer to home service through company owned service outlets.

Brand visibility is key to business growth. How has Spectranet been able to maintaine its brand visibility in the face of COVID-19?

With people confined to their

Ajay Awasthi

homes most of the time, there has been a distinct shift in the media consumption habits within the athome entertainment segment. In order for the Brand to stay visible and relevant to the target audience, firstly Spectranet, and I’m sure most other brands, diverted significant Ad spends to online media. Secondly, it was important to recognize that media consumption habits have changed and varied across generations, for example, Millennials (2437 years) are more into watching on-line videos while Gen X (38-56 years) got hooked onto broadcast TV most of the time. Customizing the brand messaging and media vehicles, therefore, was critical for effective communication.

Most internet service providers went under during the first wave of COVID-19. DO you foresee more of them going down in this second wave of COVID 19, and what is the way out?

If that’s what your research says, I’m not surprised a bit. Smaller Internet Service Providers (ISPs) play a critical role in addressing under-serviced markets as they are better positioned by virtue of having superior understanding of the micro-markets and customers.

The smaller ISPs, though are vulnerable and need an enabling policy environment to grow.

Let me explain this further. Post launch of 4G LTE, the lager MNOs with superior pricing power and the eagerness to quickly gain www.businessday.ng

market share, have unleashed a data price war to the detriment of the industry as a whole. While MNOs voice-based revenue is protected via a Floor Price below which they can’t sell, the same is not true for Data pricing. In the absence of a floor price for Data, MNOs resort to predatory pricing forcing smaller ISPs to copy and sell below cost. Without the safety net of voice revenues to fund the below cost selling of per GB data, the smaller ISPs go down.

This anomaly in the policy framework needs to be addressed for the nurturing of a healthy ecosystem ensuring a level playing ground for smaller ISPs. Consumers have been clamoring for speed of internet connectivity. How has Spectranet been able to manage speed in its internet service delivery?

Being a pioneer in bringing 4G LTE technology to Nigeria way back in 2013, Spectranet is known for providing high speed internet connectivity at affordable prices and excellent customer service.

We have been witnessing a steady increase in the requirement for higher data volumes and higher speeds over the years. At Spectranet we follow a time- tested mantra of staying aware about changing consumer trends and investing ahead of the curve. This has helped us in delivering consistent customer experience even during the COVID-19 onset.

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As internet service provider, what is your view about the general belief that Nigeria has the highest rate in the cost of internet service delivery worldwide?

If I recall correctly this belief was created about two years ago by citing an outdated report from a UK based website. The report was dated. With the average price per GB, as per NCC’s November 2020 report, at N 487.18 , Nigeria is doing quite well in Data pricing. Also, if you refer the latest report dated 27th April 2020 by the same site, Nigeria is placed at 58th position with average price per GB at USD 1.39 (same as in UK) out of 228 countries listed in the report. That’s a good progress!

It’s evident that data is not at all overly priced in Nigeria in spite of extremely high input costs like price of National bandwidth. Just to give you an example, the cost of carrying the same volume of data traffic from Abuja to Lagos is almost 3-6 times of the cost for carrying it from Lagos to London.

It’s also pertinent to add that cheap is not necessarily the best when it comes to Data. ISPs like Spectranet committed to providing 24x7 data connectivity with consistent quality parameters and excellent customer service, need to spend significantly higher to deliver 1 GB of data. So, a balance needs to be arrived at between the cost, price and the desired quality of service.

In the latest report released be GSMA, it advised African governments to make cost of spectrum licenses more affordable as a first step towards maximizing the benefits from broadband connectivity. What is your take on this?

Availability of affordable Spectrum, inter alia, is a key driver for the rapid growth of broadband connectivity. It’s like basic raw material for conventional industries and therefore better and cheaper availability of spectrum will help operators provide quality services at extremely affordable prices. It’s also important to add that it’s not only the higher prices of the spectrum which impact the end-user pricing but also the cost of lease line, deployed for back haul, plays a major role. The cost of in-land lease lines, as cited earlier, to carry data traffic remains extremely high in Nigeria. Similarly, the cost of infrastructure like towers is a critical determinant. It’s important to take a comprehensive view on the complete cost structure rather than just addressing one part of the cost chain. @Businessdayng

There have been reports on the rise of cyber-attacks on organizations and individuals who operate in the cyberspace. How secured are the internet solutions that you offer to customers?

With more and more digitalization happening, the vulnerability to cyber attacks has increased for sure. Cyber Security threats caused

by DDoS, Malware, Emotet etc. are quite common these days. As an operator we take cyber security very seriously and have deployed sophisticated equipment to thwart and neutralize these threats. There are multiple layers of cyber security comprising latest generation of Firewalls and Intrusion Prevention systems which effectively neutralize such threats.

Spectranet has been in Nigeria for some years winning awards as one of the best service providers, what makes Spectranet so unique in providing better customer service ?

At Spectranet, we constantly remind ourselves that Customer dissatisfaction is just one bad experience away. We call these bad experiences “customer pain points” and assiduously work on getting down to the causative factors and addressing these. Proactive customer service (anticipating customers’ needs and pain points) is like a religion at Spectranet. The focus always is on eliminating these pain points or bad experiences by staying ahead of the causative factors.

A critical factor which drives proactivity is the design of Customer Service Delivery (CSD) organization and the hierarchical distance from the front-end Customer Service Executive to the CEO. At Spectranet we have managed to keep just two layers between CSE and CEO and that helps significantly in staying tuned to customers’ requirements.

The federal government is projecting 70% broadband penetration across the country by 2025. If achieved, how will it impact internet services delivery in Nigeria?

With sustained efforts being put in by Honourable Minister of Communication and Digital Economy and the regulator NCC through a facilitating policy framework, this target of 70% broadband penetration would certainly be achieved.

The achievement of this milestone will drive up internet usage and data volume significantly. Internet Service providers need to continuously invest in the capacity to ensure service delivery is not compromised.

Tuesday 20 April 2021

BUSINESS DAY

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In association with

Why Nigeria’s 18.17% inflation is bad news for internet affordability FRANK ELEANYA

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t an 18.17 percent inflation rate, Nigeria is not among the top ten countries with the most inflation in the world, but it is now among the top twelve with the latest data from the National Bureau of Statistics (NBS).

That is a problem for internet affordability, financial inclusion and by extension, the country’s efforts towards attaining a digital economy.

According to the NBS, Nigerians now buy food at higher prices than they did in February. Food prices surged by 22.95 percent in March compared to 21.79 percent in February.

BusinessDay reported that it now costs on average of N7,400, a quarter of Nigeria’s minimum wage, to prepare a pot of Jollof rice, a popular food in Nigeria, almost double

what it cost five years ago.

“90% of Nigeria’s working population spends ~60% of their income on food/ food-related expenses. And Nigerians who earn less than minimum wage spend 95% on food. Across the country, the average household spends 65% of its income on food expenditure,” Odun Eweniyi, co-founder and COO of Piggyvest tweeted.

In other words, more Nig e r ia n s n ow have to prioritise feeding before buying internet data.

One of the reasons many people do not yet access and use ICT services is the high cost of connectivity relative to income. The UN Broadband Commission’s affordability target is 1GB of mobile data priced at no more than 2 percent of monthly Gross National Income (GNI) per capita.

According to a report

by Alliance for Affordable Internet (A4AI), 1GB of data

costs Nigerians 1.7 percent of their monthly income, on average, compared with 7.1 percent for Africa and 2 percent average for the rest of the world.

“Internet access gives people the tools to earn a living and start a business. It offers them ways to build skills and achieve their ambitions.

And it provides them access to information to support their families and be active citizens in their communities.

The billions of people still unconnected are missing these opportunities and so are societies where digital exclusion remains the norm,” Sonia Jorge, executive director at Alliance for Affordable Internet said in a statement sent to BusinessDay. “ Nigeria’s competitive broadband market and cheap data plans notwithstanding, more than 42 percent of the country’s entire population are still offline. Many people

offline cite mobile data affordability as one of the reasons they do not go online and it is critical to an efficient and sustainable financial inclusion drive.

In February, Surfshark, a private network service provider, released a report which found that the average Nigerian will need to work 27 minutes 55 seconds for 1 gigabit (GB) internet data, says a new report from Surfshark, a global privacy protection company. The global average is 10 minutes.

The same report showed Nigeria at the bottom of countries with affordable i nt e r n e t. Nig e r i a ra n k s 85th out of 85 indexe d countries. People in the most populated country in Africa have to work 33 hours 42 minutes to afford the cheapest broadband internet in a month. The global average is three hours 48 minutes a month.

The COVID-19 pandemic

ha s c o nt r i b u t e d t o t h e drop in income levels and this, in turn, has affected individuals’ decisions to consume internet services.

The extent of the impact was recently made evident in the report of the big players in financial services.

Nigeria’s tier one banks earned only N6.8 billion from electronic transactions in 2020 compared to N61 billion they received in 2019.

Gbenga Sesan, director of Paradigm Initiative says the new inflation figures take the attention to what is a priority to a lot of people.

For s ome people being connected on the internet has become a necessity, h e n c e t h e y a re a l w a y s going to consumer internet data. The International Telecommunication Union (I T U ) puts the numb er of Nigerians actively connected to the internet between 49 to 50 percent of the mobile population.

most users in making choices of phones to buy.

From extraordinary battery life, huge storage capacity, high camera and video quality, aesthetics and affordability, the new series are worth having.

In terms of battery life, the Galaxy A32 and A72 come with a 5,000mAh battery, while the A 52 offers a 4,500mAh battery life; all guaranteeing a 2-day steady power. Again, the series offers fast charging of 25W, with the phone charging up to

50 percent in just 30 minutes.

In terms of camera and video, they are now the benchmark for camera quality with 64 MP quad cameras. It features four cameras on the back and one selfie snapper on the front. The rear cameras are a combination of a 64MP primary camera, a 12MP ultra wide angle camera and two 5MP shooters. It has Optical Image Stabilization (OIS), which enables quality image output.

Galaxy A series: Beyond making, receiving calls OBINNA EMELIKE

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n Januar y this year, Samsung, leading global electronics and home appliances manufacturer, launched brand new additions to its successful Galaxy A series in the Nigerian market.

With the amazing new and affordable offerings, which included; Galaxy A12, A02 and A02s, Samsung succeeded in putting power in the hands of more people.

Barely two months from the January launch, had Samsung yet again surprised the market, particularly Nigerian phone users, with a much innovative Galaxy series.

Since March 19, 2021, lovers of quality cell phones across the world have witnessed breathtaking innovation with Galaxy A32, A52 and A72. The three latest phones from the stable of Galaxy A series offerings are simply technology at work, enhanced

fun, convenience, working tool all combined, yet affordable.

They are the updated versions of their previous

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editions of A31, A51 and A71; hence implying that Samsung has taken its innovations a notch higher in these updated versions.

Though the older versions were successful when they were launched in 2019/2020, the new offerings are expected to move market globally as the enthralling features make them irresistible for phone users.

Taking a look at the general features of the series, they cover all areas that influence

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@Businessdayng

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news

Lagos goes after corrupt officials, contractors with own ‘EFCC’ ...as Sanwo-Olu signs anti-corruption bill JOSHUA BASSEY

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ough days lie ahead for duplicitous individuals in Lagos, especially those in the public sector and government contractors, as the state government is establishing its own anti-corruption commission.

The Lagos anti-corruption commission would be similar in operations, to federally established Economic and Financial Crimes Commission (EFCC). Its chairman would be appointed by the state governor, subject to the ratification of the House of Assembly.

The move is aimed at deepening the culture of accountability and transparency in the expenditure of appropriated public funds in Nigeria’s commercial capital. Already, Governor Babajide Sanwo-Olu

has signed the anti-corruption commission bill.

The executive sponsored legislation tagged “Public Complaints and Anti-Corruption Commission Bill, 2021, had earlier been passed by the state House of Assembly. With the signing of the legislation on Monday, the commission would be set up in the coming days to investigate and prosecute government officials and registered contractors indicted for economic crimes and financial misappropriation. If the investigation leads to prima facie case, the offender would be prosecuted in court.

Sanwo-Olu, also on Monday, assented to the Lagos State Lotteries and Gaming Authority Bill, 2021, initiated by the executive arm to coordinate activities of lotteries agencies operating within Lagos.

The governor described the move as a testimony to the

effort towards entrenching accountability in governance and checking malfeasance among officers entrusted with public resources.

“The bill establishing Public Complaints and Anti-Corruption Commission is an important legislation critical to the delivery of quality services to the citizens. When we came in, we had said we would be accountable and responsible in the appropriation of the state’s resources. We want to stand in front of the citizens to give an account of how public funds are being spent.

According to Sanwo-Olu, the law would not only ensure accountability of public funds, responsibility of public office, but also promote dialogue among public officers to keep the trust of the people in the discharge of their duties in line with transparency.

“The anti-corruption com-

Obaseki advocates diversification of revenue from crude oil Churchill Okoro, Benin

mission will ensure that all approved activities are implemented in accordance with budgetary allocation,” SanwoOlu said.

Giving further insights into the Lotteries and Gaming Authority Bill, 2021, the governor explained that it would simplify and incorporate technological innovations in the gaming sector.

The law sought to harmonise five gaming and lottery formats, such as casino, jackpot, pool, lotto, and sports betting, thereby regulating the sector and checking fraudulent activities of unregistered game centres within the state.

BusinessDay gathered that the former lottery law of the state did not meet the contemporary needs in the industry, which necessitated the executive initiating the new law to accommodate technology in regulating the business.

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do State governor, Godwin Obaseki has advocated for the diversification of the country’s revenue base from crude oil.

The governor, while speaking with journalists in Benin City, want attention to paid to the non-oil sectors of the nation’s economy.

Obaseki said “Before the civil war, we had no crude oil: The regions relied on the resources that they had and the government was run based on taxation, which was derived from the regions and production, particularly agricultural production in the regions.

“In the last 40 years or so, crude oil came and replaced those economic activities and earnings. So, we now run a federation relying almost exclusively on crude oil. For a country that is still hoping on crude oil, it’s only a question of time and pretending and doing all sorts of interesting and financial gymnastics to keep it going; it’s only a question of time.”

Noting the need for lead-

ers to listen and work, always, in the interest of the people, Obaseki said: “When they say government, what they really mean is us; it’s about how we engage with the citizens.

“The people in government think they are better and know more than the citizens. When you say something, they disagree with you because they think they are in power and know more than you.

“We officials of government, civil servants and politicians, because we are in government, think that we know better than the people.

But it’s a fallacy, because it’s the taxes these people pay from their own economic activities that will sustain us going into the future.”

“It is their sweat that will pay our salaries; they cannot be foolish for them to be producing the resources that keep us. Therefore, our emphasis must be on them; we have to keep them alive.

“That is why the government must create an enabling environment for the citizens to thrive, so that from their wealth, the government can be sustained,” he added.

Glo deepens telco innovation with Beep Call Service BUNMI BAILEY

L-R: Steven Heukelom, chief technical officer, Lekki Port; Jérôme Pasquier, ambassador of France to Nigeria; Lionel Odeyer, managing director, Lekki Freeport Terminal LFZ Enterprise, and Ben Zhang, operations manager, Lekki Port, during the visit of the French Business Advisors to Lekki Port, in Lagos.

Wike wants states to control mineral resources …says FG has failed to develop all sections of Nigeria Ignatius Chukwu

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overnor Nyesom Wi k e o f R i v e r s State wants states to control their mineral resources because the centre has, according to him, failed to use it to develop all sections of the country.

Wike, who put this demand before the minister of State for Mines and Steel Development, Uchechukwu Ogah, said states should pay royalty.

This, he insisted, has become pertinent because the Federal Government which unilaterally controls the country’s rich mineral endowment

has failed to translate the mineral wealth into overall economic development.

Ogah was at the Government House, Port Harcourt, Monday, on a courtesy visit to Wike.

The governor maintained that in order for the country to benefit from its vast mineral endowment, the Federal Government should concentrate on the formulation of policies that will facilitate an improvement in the governance of the mining sector to improve the social welfare of the citizens.

He urged the minister to push for reforms that will enable states and local governments take charge of mining of solid minerals in their www.businessday.ng

domain and then pay tax to the centre.

He went on: “It is very important for people to know that part of the problem in this country is that everybody is depending on oil when we are also supposed to look at other minerals. Minerals play a great role in terms of raising revenue for any country. So, our overemphasis on oil has reduced our impact on other minerals.”

He noted that if the country fully harnessed the gold deposits in Zamfara as well as other minerals in other states of the federation, the country will make a lot of revenue from these minerals that can accelerate its development.

Governor Wike lamented that despite the possibility of the Ajaokuta Steel Company project generating huge revenue for the country and creating not less than 3000 jobs, the Federal Government for political reasons has failed to actualise the country’s aspiration to become a major player in the global steel industry.

The governor declared that the Rivers State was prepared to collaborate with the centre to develop the mineral sector of the country. He advised the government at the centre to avoid “playing politics with issues of economic development and strive to entrench the ideals of good governance in the country.”

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lobacom has reiterated the advantages of one of its innovative voice call offerings, Beep Call Service, in a recent announcement.

According to the announcement, the Glo Beep Call Service enables Glo subscribers with low or zero airtime balance to reach out to a selected number across all networks as they may require.

It is an intelligent solution through which Glo subscribers can call loved ones, friends and associates anytime they run out of airtime.

The network will then leave a “missed call” on the called number, prompting him or her to call back.

“Our Beep Call Service is stop-gap solution conceived to enable maintain useful connections with their contacts, especially at critical periods of emergency. This offering has brought relief to many of our subscribers who use it as a last resort to pass messages to their friends, family and loved ones. As a company, we will continue @Businessdayng

to provide a wide variety of innovative packages that are designed to meet the needs and expectations of our numerous customers,” the telco stated in its announcement.

Moyosola Ladipo is a Lagos-based property manager whose car packed up one evening in Lagos and attested to using the service in that situation. According to him, “It was the Glo Beep Call Service that saved the situation. I had exhausted my credit, hoping to recharge in the neighbourhood when I get home. I used the beep service call and lo and behold my wife called back and later sent me credit, which I used to contact my mechanic, who came in later to fix the car”.

A l s o, A m i s u U s m a n , who lost his purse, and was stranded in Nyanya, an Abuja suburb, without credit on his phone, used the Glo Beep Call Service. He said, “My brother called me after seeing the missed call on his phone and I explained my situation after which he transferred money to me, which I collected at a nearby bank for my transport fare back home, It was not funny that day, I was saved by the Glo beep service”.

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NEWS Nigeria without agric policy for first time in 10 years CALEB OJEWALE

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f words alone suffice, agriculture is to become the cornerstone of Nigeria’s economy. But the country currently does not even have an agriculture policy since the last one code-named ‘Green Alternative’ terminated in 2020. Yet, the President Muhammadu Buhari administration has repeatedly claimed agriculture is what it is betting on to stimulate Nigeria’s ailing economy, and contribute towards creating the millions of jobs it envisages.

Apart from attention the sector should be getting, if government rhetoric is anything to go by, the existence or not of a policy would not be a big deal. But this is also the first time in 10 years that Nigeria would be without an agric policy.

In 2011, Goodluck Jonathan, with Akinwumi Adesina then as minister of agriculture, launched the Agriculture Transformation Agenda (ATA). Under Muhammadu Buhari as president in 2015, the Agricultural Promotion Policy (APP) was launched to cover 2016 to 2020, to consolidate on the already established ATA policy.

However, with rising food prices and struggling agricultural productivity, a policy could have helped give direction to the sector, while also giving confidence to those that would want to consider investing. At the time of filing this report, Nigeria has not unveiled any such new policy.

“There is no clear-cut advertised policy,” said Kabir Ibrahim, national president, All Farmers Association of Nigeria (AFAN), saying, “The minister of agriculture is not hands-on in how to drive agriculture.”

Emmanuel Ijewere, vice president, Nigeria Agribusiness Group (NABG), also reiterated the AFAN president’s position, saying, “There is no policy” for agriculture at the moment, and this has the sector’s administration in the country rudderless.

BusinessDay learnt a committee was set up early last year to come up with a new agriculture policy before the old one expired, but so far, that objective has not been achieved.

Ibrahim said a former AFAN state chairman who was a member of the committee tasked with ‘fine tuning’ the new policy reported

they met only twice and till date there is no final document.

Ijewere said the same thing, noting of someone else in the same committee, who described it as an unserious committee that was more concerned with importation of tractors.

“Early last year, we started putting another policy together, but the new minister brought in Brazilians for a programme hinged on bringing in tractors from Brazil for money making rather than a policy,” Ijewere said.

A mechanisation programme being promoted by government is what Ijewere was referring to. This is a $1.2 billion loan under the Green Imperative project (GIP), an agricultural bilateral project between Nigeria and Brazil that is expected to boost mechanisation and help farmers improve their productivity.

The mechanisation programme has been confused by some people as the new agriculture policy, which it clearly is not, but at best, something that should have emanated from a broader, comprehensive policy. Tractors for instance will mostly serve crop farmers, but agriculture is beyond tilling the soil, and mechanisation needs are far beyond tractors or even just primary farm equipment.

For Bello Dogondaji, national general secretary, Federation of Agricultural Commodity Associations of Nigeria (FACAN), the mechanisation programme suffices as a policy.

“The present minister introduced a policy on mechanisation, which has to do with the Brazilian government,” said Dogondaji, noting, “Their intention was to ensure mechanisation is along the complete value chain; production, processing and marketing. From the primitive, small-holder farming, it wants us to upgrade to mechanisation.”

While programmes and policies are sometimes used interchangeably, a programme is traditionally a by-product of policymaking, one of identified means to achieve the broad objectives of a policy. The policy embodies the overall direction of a government, specific problems to be addressed and expected outcomes, while programmes are deployed to address different

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Asue Ighodalo (l), chairman, Nigerian Economic Summit Group (NESG), with Laoye Jaiyeola, CEO, during the NESG 2021 annual general meeting for the appointments of eight new board members, at the Summit House, in Lagos, recently.

Does Pantami have free access to NIN database?

FRANK ELEANYA

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ne of the most iconic scenes of the Batman movie, Dark Knight, produced

by Christopher Nolan, and released in 2008, is the dialogue between Bruce Wayne and the character Lucius Fox portrayed by Morgan Freeman.

Christian Bale, who plays Bruce, Batman’s character, knew he was running out of time to find his long-lost love, Rachel Dawes, held hostage by the Joker. To save her, Batman was ready to tap into the city phone database system, which he could access directly from his bunker.

Looking at the impressive line of computer monitors tracking people’s cell phones in real-time, Batman exclaimed, “Beautiful!”

But Lucius replied, “Beautiful, unethical, dangerous... this is wrong… this is too much power for one person.”

Since the news of Isa Ali Pantami, minister of communications and digital economy, voicing support for jihadist movements like Al Qaeda and Taliban became public, many Nigerians have said they were concerned about the safety of the National Identification Number (NIN) database.

Pantami’s ministry of communications and digital economy oversees the National Identity Management Commission (NIMC) in whose custody is Nigeria’s national identity database.

Like Lucius, the concern of many people is whether the information they supplied during the NIN registration exercise, which is now warehoused by NIMC, would not be compromised by someone as highly placed as the minister of communications and

digital economy. There are over 51 million Nigerians with registered NIN. The minister however renounced the inciting comments saying he was young and his views immature at the time the comments were made.

“Some of the comments I made some years ago that are generating controversies now were based on my understanding of religious issues at the time, and I have changed several positions taken in the past based on new evidence and maturity,” he said.

Many Nigerians seem unimpressed by the minister’s repentance, saying he remains a national threat giving he superintends a government department that is in charge of the national database.

The NIMC Act gives the best explanation of the data governance surrounding the NIN database.

The NIMC Act The NIMC Act of 2007 established a national identity database that contains registered information or data relating to citizens of Nigeria and non-Nigerians.

The Act empowers the Commission to create, manage, maintain and operate the National Identity Database, including the harmonisation and integration of existing identification databases in government agencies and integrating them into the National Identity Database.

Membership of the Commission is drawn from mostly data generating government agencies such as Independent National Electoral Commission (INEC), National Health Insurance Scheme (NHIS), Federal Road Safety Corps (FRSC), Federal Inland Revenue Service (FIRS), National Population Commis-

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sion (NPC), and the directorgeneral of the NIMC. Others are security agencies like the Nigeria Police Force (NPF), Nigeria Immigration Service (NIS), Office of the National Security Adviser (ONSA), and Economic and Financial Crimes Commission (EFCC). To represent the public interest are three persons who are knowledgeable in Information Communication Technology or identity management.

The minister is not mentioned in the Act as a member of the Commission despite his position as the head of the ministry. The minister does not also appoint the director-general of NIMC. The president makes the appointment. This provision could be to protect the director-general from being influenced by a powerful official like the minister.

The Act also limits the powers of the minister on the national identity database with the mandatory appointment of a chairman. The chairman of the Commission, according to the Act, is elected on a parttime basis by the President of Nigeria. The chairman holds office for four years and may be re-appointed for a further four years and no more.

The Act also provides that no person or body corporate shall have access to the data or information contained in the database with respect to a registered individual entry except with the authorisation of the Commission.

Does the minister have unchecked access to the database?

Security experts, who spoke with BusinessDay on condition of anonymity because of the sensitive nature of the matter, say while it is @Businessdayng

unlikely the minister or any single official has direct access to the national database, the country’s poor record in data governance makes it a possibility for there to exist a ‘backdoor’ through which data can be moved without authorisation.

The financial services sector, one of the most heavily regulated markets in Nigeria, still has poor data governance records. This is despite the existence of the Nigeria Data Protection Regulation (NDPR), which enforcement is yet to catch on in the industry.

The Nigerian Inter-Bank Settlement System (NIBSS) recently reported that Nigerian banks lost N3.5 billion between July and September 2020 to fraud-related incidences with data tampering mainly responsible.

The NIMC Act may not have presented a direct backdoor to data abuse, however, some of its provisions on disclosure of registration can easily be misinterpreted.

For example, it says the provision of information is authorised when such disclosure is (a) in the interest of national security; (b) necessary for purposes with the prevention or detection of crime; or (c) for any other purpose as may be specified by the Commission in a regulation.

Its lack of specificity on what constitutes a threat to national security or when it is “necessary” to release information to the state security agencies for the purposes of detecting crime.

“Beyond proper data governance, no one knows exactly the last time NIMC carried out an audit,” notes an expert

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NEWS

In search of more money, Nigeria changes...

Continued from page 1

investors to Nigeria’s oil and gas sector.

The report added that the changes would also guarantee that the state oil company, the Nigerian National Petroleum Corporation’s (NNPC) assets and liabilities would be transferred to a limited liability corporation. This will help oil companies to collect money owed by the NNPC. “The changes should give green light to IOCs who are getting weary of Nigeria’s oil and gas sector,” Kelvin Atafiri, who runs Cavazanni Human Capital Limited, an investment firm exposed to the oil and gas sector, said.

Africa’s largest oil-exporting nation has not carried out a full revamp of the law underpinning its oil and gas sector since the 1960s. Piecemeal tax hikes, and a growing lack of certainty around terms, have made companies wary.

Chevron is selling assets in Nigeria. Total’s stake in the profitable Bonga offshore field is also on the block, while ExxonMobil is looking to shed Nigerian fields as part of a global retrenchment strategy.

“The latest changes may allow some IOCs change their minds and invest more in Nigeria,” Atafiri said.

Over the years, Nigeria lures just a tiny fraction of oil and gas investment in Africa, even though it is the continent’s largest crude producer and has significant untapped reserves.

The sector has a reputation for corruption, inefficiency and problems ranging from high production cost to unrest sparked by environmental damage and lack of development for local communities where oil is extracted.

Oil majors such as Royal Dutch Shell, Chevron, ExxonMobil, Eni, Total and Equinor have hinged their investment

decisions on the outcome of the PIB, and other fiscal frameworks by the Federal Government.

According to them, the country did not take any major investment decision in deepwater between 2015 and 2019, despite a number of available potentially viable projects.

The African Energy Chamber (AEC), in its African Energy Outlook 2021, disclosed that with the $24 billion loss of investments in the oil and gas sector, Nigeria would account for 30 percent of the total of $80 billion loss of investments that would be recorded in the petroleum industry across Africa.

To address these and maximise oil revenues for an OPEC-member country that records among the world’s highest poverty rates, the Nigerian government has been working for 15 years on new regulations.

The 239-page PIB, which is an oil reform bill, was submitted to the National Assembly

by President Muhammadu Buhari in September 2020, is key to the repositioning of Nigeria’s oil and gas industry, especially under its postCovid-19 agenda.

Nigeria has repeatedly failed to pass the PIB, which is considered relevant to the country’s quest to make its oil industry regain its competitiveness, attract investments, 20 years after it was initially conceived.

For most experts, passing the bill will certainly remove uncertainty that has discouraged investments for years.

But the answer to whether the PIB will make Nigeria’s oil and gas industry more competitive remains to be seen, as most stakeholders expect the country to continue being a high-cost location for energy investments due to insecurity off the coast and across the country.

Nigeria without agric policy for first...

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aspects of that policy.

“A policy comes from an intellectual input, and this only comes from intellectually sound people. You cannot compare Adesina with the current minister, not even with Audu Ogbeh in terms of intellectual ability,” said a prominent player in the agric sector who pleaded anonymity.

“For you to say we lack a policy, this minister has only one agenda in his life; to become the next governor of Kano State. He is rudderless, likewise the ministry of agriculture,” said the anonymous source.

For Ijewere, however, agriculture’s saving grace is not being in the exclusive list, therefore, as the state governments increasingly realise there will be less money from the centre, they have to develop their agricultural potentials. Each state is beginning to set up its agricultural policy, which is a better way to drive the sector than a centrally led one.

The implication of Nigeria lacking an agriculture policy as BusinessDay learnt implies the country is not walking its talk in developing agriculture to drive economic growth, fight unemployment, and curb food insecurity. www.businessday.ng

President Muhammadu Buhari (l) with Usman Baba, acting inspector general of police, during their meeting at the Presidential Villa in Abuja, yesterday.

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Naira adjustment, end to subsidy...

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sis shows.

The fall in oil income and economic impact of COVID-19 have reduced funds available to be distributed under the Federal Accounts Allocation Committee (FAAC), forcing the government to raid its savings such as excess crude account, stabilisation account, and even Nigeria LNG dividend to push up FAAC to at least N600 billion required each month.

Zainab Ahmed, Nigeria’s finance minister, on Monday said the country recorded a shortfall of almost N50 billion in the March FAAC, and there was not much money in other accounts other than N8.5 billion found in the exchange rate differential account, which it added to FAAC, pushing it to N605 billion.

But this shortfall could worsen, leading analysts to recommend ending fuel subsidy as a way out and adjusting how dollar oil proceeds exchanged in naira.

Subsidies, by government estimates, cost Nigeria between N80 billion and N100 billion monthly captured as ‘under recovery’ in the accounts of the Nigerian National Petroleum Corporation (NNPC), depending on oil prices.

For example, according to the NNPC March FAAC report, the February 2021 value shortfall of N73 billion would be deducted from March 2021 proceeds. This shortfall is due to subsidy deduction.

Since this spending is not appropriated by the National Assembly, it is treated as a

cost of doing business by the oil corporation, leading to at least a drop of N100 billion into FAAC’s monthly pot at the current crude oil price.

A recent PwC report noted that the President Muhammadu Buhari-led administration spent N1.12 trillion on petrol subsidy within a period of three years.

Wolemi Esan, energy partner at Olaniwon Ajayi, said rather than investing this much on fuel subsidy, priorities might be redefined such that such costs, in a phased manner, be re-directed towards revitalising infrastructural deficit in the country.

“This would go a long way in reshaping the cost and standard of living in Nigeria as well as attracting the influx of investment-related and commercial activities in the country,” Esan said.

However, there are concerns shared by government officials that removing subsidies will fuel hardship for Nigerians, as the finance minister said government was also concerned that it could further worsen inflation.

According to Esan, efforts to improve refining to boost local content and local production will increase drastically, and there may not be a need for subsidy in the first place.

“More so, to further hedge any risk of hardship being meted out on Nigerians, a phased removal of petroleum subsidies is being proposed,” Esan said.

Fuel subsidy is encouraging smuggling of refined petrol across the borders, which is eroding value for Nigeria.

Does Pantami have free access to...

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who pleaded anonymity.

The NIMC Act mandates the Commission to not later than six months after the end of each year, submits to

the President a report on the activities of the Commission and its administration during the immediately preceding year and shall include in the report the audited accounts

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Furthermore, states too do not have a say in how their portion of the subsidy budget is spent.

Some states may choose to invest their share in providing health insurance for their people or build badly needed infrastructure instead of buying petrol for them, as the latter benefits only the well to do who can afford cars mostly in big cities like Lagos, Abuja and Port Harcourt.

Another argument against subsidy is that mass transit vehicles, public transportation, trailers and lorries for haulage of goods already run on diesel, which is already deregulated and currently retail at N265/litre.

Some analysts have also called for a reform of the rate at which proceeds from crude oil export, royalty, petroleum profit tax, and dividend from NLNG are converted to the local currency.

That conversion of oil proceeds to the local currency is done today at between N389 and N400 a dollar. By simply moving this to a mean of N450/$1, the allocation account of the federation could swell by anything from N80 billion to a high of N100 billion each month given rising crude oil prices.

“We have also seen these numbers. We know that the differencebetweenthecurrentrate of converting FAAC allocation and the so-called mean rate of around N450 to the dollar could theoretically amount to increasing FAAC allocation by as much as one-seventh of N600 billion,” a senior Federal Government official told BusinessDay. The fear that such an adjustment could trigger a further spike in inflation is mitigated by the fact that the blended of the Commission and the auditors’ comments thereon.

The last time NIMC published an annual report was in 2014, which means for about 6 years the Commission has yet to release a summary of its dealings with the national identity database. @Businessdayng

rate, which leading firms use for pricing their inventory replacement, is already at the market rate for the dollar. While they used the rate of N360 to the dollar in January 2020, manufacturers were applying the rate of N470-N476 to the dollar as of January this year.

The blending rate is the average rate at which manufacturers access foreign exchange used for importing their raw materials. This is typically the average rate derivable from merging the FX manufacturers secure from the official CBN channel with the FX from the autonomous sources, and arriving at an effective rate.

The Federal Government has been working itself into lather over the revelation by Godwin Obaseki, Edo State governor, that the CBN printed between N50 and N60 billion monthly to augment March 2021 FAAC due to dwindling revenue.

“The issue that was raised by the Edo State governor for me is very, very sad. Because it is not a fact,” the finance minister told journalists in Abuja.

“What we distribute at FAAC is revenue that is generated, and in fact, distribution revenue is public information.

We publish revenue generated

by FIRS, the customs, and the NNPC and we distribute at FAAC. So, it is not true to say we printed money to distribute at FAAC, it is not true,” she said.

This argument misses the larger issue raised by the governor that the country’s expenditure profile is rising faster than the revenue, and states in Nigeria are increasingly unproductive.

According to data by the National Bureau of Statistics (NBS), the internally generated revenue of Nigeria’s 36 states and Federal Capital, Abuja, amounted to N1.31 trillion in 2020 compared to N1.33 trillion recorded in 2019, indicating a negative growth of -1.93 percent year-on-year.

(See details on Insight & Policy, back page).

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Nigerian governors pick May for judiciary, legislature financial autonomy Tony Ailemen, Abuja

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hairman of the Nigerian Governors’ Forum (NGF) and governor of Ekiti State, Kayode Fayemi has set May 2021 for the commencement of implementation of the financial autonomy for the judiciary and legislature at the state level.

The non-implementation of the policy, as captured in the amendment of the constitution, led to the current nationwide strike by judicial workers.

But Fayemi, while speaking with State House correspondents after a stakeholders meeting chaired by the chief of staff to the president, Ibrahim Gambari, assured that the implementation of the provision will commence “as soon as the final document that is being cleaned up emerges.

We’re not going to put a timeframe in the air, but it will be implemented as soon as possible, definitely no later than the end of May 2021” Recall that President Muhammadu Buhari had in June 2018 assented to the Constitution Fourth Alteration

Bill which granted financial autonomy and independence to houses of assembly and judiciary of states.

Upon the president’s signature, it was expected that the amounts standing to the credit of the judiciary and houses of assembly would be paid directly to them, and no more through the governors.

The amendment granted full autonomy to the judiciary and houses of assembly at the state level, just like what operates at the federal level.

Following the non-implementation of the constitutional provisions, President Buhari had in 2020, signed Executive Order 10 mandating every state government to set up a committee for its implementation.

The Executive Order 10 mandates that the committee be made up of the commissioner of finance, accountantgeneral of the state, representative of the state budget office, chief registrars of state high court, sharia court of appeal and customary court of appeal, (where applicable), the clerk to the state house of assembly and the secretary of the state judicial service committee or commission.

The committee was also

to determine and ascertain from the revenue profile of the state, a workable budget for each arm of the state government based on the request and needs of the accounting officers; and (c) the committee shall be given and accorded legal recognition in the various relevant appropriation or funds management laws of the states.

Notwithstanding the provisions of this Executive Order, in the first three years of its implementation, there shall be special extraordinary capital allocations for the judiciary to undertake capital development of state judiciary complexes, high court complexes, sharia court of appeal, customary court of appeal, and court complexes of other courts befitting the status of the courts.

Fayemi, who appealed to the workers to end their strike, said “it is in the interest of the nation, adding “we believe that the striking workers should return to their offices because as far as this has gone, we have met with all the parties concerned. The president, through the chief of staff, has also been briefed on this matter and has been monitoring what has been happening”.

First Bank partners LAWMA on new uniform for sweepers OBINNA EMELIKE

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he Lagos State Waste Management Authority (LAWMA), in collaboration with First Bank of Nigeria Plc, has launched new 16,000 uniforms for sweeping workers of the authority across the state. LAWMA has 25,000 workers.

The uniform transition is a departure from the old orange to a new lemon-green colour, which is a total rebranding of LAWMA’s image for strategic purposes.

The new uniform is part of First Bank’s initiative to support the Lagos State Government and LAWMA for the cleanliness of the state and safety of the sweepers against road accidents.

The partnership with the private sector saw First Bank involvement to ensure the safety of LAWMA workers through its corporate social responsibility drive.

It also saw First Bank, as going beyond its traditional responsibility of lending and investment efforts just to

ensure reduction in mortality rate of its host communities.

LAWMA , on the other hand, sees First Bank’s initiative as a welcomed and applauded development, as it hopes for more of such collaborations in the future.

Speaking at the launch in Lagos recently, Hakeem Akinleye, MD/CEO, LAWMA, said the collaboration with First Bank is remarkable to ensure reduction of mortality rate of road accidents, which had claimed many lives of road sweepers in the last one year across the state.

Akinleye pointed out that First Bank has a character of giving back to the society based on the uniform, which the bank has demonstrated through its corporate social responsibility. He hopes to see the bank collaborate more with the authority to improve the economic lives of the workforce.

“The private sector, especially First Bank recognizes our services. First Bank has done well with this noble gesture. We want to see more economic impact on our staff as well”, Akinleye said. www.businessday.ng

The LAWMA boss noted that rebranding of the uniform is a second phase to improve road visibility at night among motorists to minimize the mortality rate of sweepers caused by road accidents.

Akinyele explained that the new uniform has visibility effects for road users to see, so as to drive carefully, especially when they notice sweepers at work.

He mandated all the workers to return the old orange uniform to the office as a condition of collecting the new one for recycling purposes.

O n his par t, Ades ola Adedunta, managing director, First Bank PLC, who is represented by Seyin Oyifesan, noted that LAWMA is one of the most important workforce in Lagos State saddled with the duty of ensuring a safe and clean environment.

Oyifesan explained the rationale behind the collaboration with the authority, saying that the safety of the sweepers is of concern to the bank. https://www.facebook.com/businessdayng

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Tuesday 20 April 2021

NEWS

Sanwo-Olu applauds police officer assaulted in viral video Seyi John Salau

G L-R: Atiku Bagudu, governor, Kebbi State; Aminu Tambuwal, governor, Sokoto State; Kayode Fayemi, governor, Ekiti State, and chairman, Conference of Speakers of State Assemblies/speaker, Bauchi State House of Assembly, briefing State House correspondents after their meeting with Ibrahim Gambari, chief of staff to the president, on the financial autonomy of state legislature and judiciary at the Presidential Villa in Abuja, yesterday.

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Access Bank acquires Botswana’s African Banking Corporation Endurance Okafor

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igeria’s biggest lender by asset, Access Bank is deepening its presence in Africa through the acquisition of a majority stake in Botswana’s African Banking Corporation.

Founded by Bob Diamond, former Barclays CEO, the African banking group, according to Bloomberg, agreed on Monday to sell its stake to Access Bank.

Access Bank will buy a 78.15 percent shareholding in the Botswana lender for a cash consideration that represents approximately 1.13 times book value, Atlas Mara said.

The amount includes a deferred portion payable 24 months after the transaction closes, which is expected in the second quarter, subject to regulatory approval, it said.

The deal marks the second transaction between Atlas Mara and the Nigerian tierone bank, which agreed to buy its Mozambique unit last September. The Lagos-based lender said it was going to acquire Atlas Mara’s assets in Botswana, Zimbabwe and Zambia.

Atlas Mara is financial services holding company that was formed to undertake the acquisition of target banks in Africa. The Londonlisted company is recouping its investment from what Bloomberg described as ‘its African foray’ after Diamond misjudged competition on the continent and paid too much for acquisitions.

According to a statement

by Access Bank on Monday, the acquisition of the Botswana bank is to “further solidify” its retail and corporate banking as well as support trade and payments across southern Africa.

“The bank has been pe-

rennially profitable, given an existing high-quality retail loan book with opportunities and scope for diversification and further expansion into corporate and SME lending,” it said.

With plans to generate as much as 30 percent of profit outside its home market, Access Bank said in December 2020 that it was considering series of acquisitions in eight new African markets spanning East and West Africa.

The lender announced in March that it received approval from South African and Nigerian regulatory authorities to acquire South Africanbased Grobank Limited.

The Lagos-based lender which currently operates in 12 countries plans to achieve its expansion plans by setting up offices in some countries, partnering with existing banks in some nations or deploying digital platforms to provide services to customers.

Access Bank expects its African subsidiaries combined with its U.K. unit to account for about 25-30 percent of profit before tax in the next three to five years from the current 21 percent.

With an appreciation of N1.537 trillion within the last year, Access Bank has ramped up its asset value to N8.680 trillion, a valuation that has helped the bank to displace Zenith Bank’s estimated N8.481 trillion asset to merge as the second largest in Nigeria.

According to market analysts, the current asset size of Access Bank is as a result of its two crucial deals outside Nigeria last year that involved the acquisition of Cavmont Bank in Zambia and Transnational Bank in Kenya.

Analysis of Access Bank’s full-year 2020 financial shows that the lender’s revenue jumped 14.7 percent to N764.72 billion from N666.75 billion the previous year.

Poor fund management bane of education in Nigeria - minister Godsgift Onyedinefu

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inister of Education, Adamu Adamu on Monday said poor management of funds has remained a major operational constraint in the education sector, particularly in the delivery of tertiary education.

Adamu said this in Abuja when he inaugurated the governing council of five federal universities.

The minister noted that funds made available by the government to universities

were limited, and therefore, tasked the newly inaugurated councils to ensure that available funds are judiciously utilised.

The affected universities are University of Lagos, University of Port Harcourt, University of Ibadan, Maritime University Okerenkoko and the Obafemi Awolowo University, Ife. The minister who was represented by the permanent secretary of the ministry, Sonny Echono also observed that the government alone cannot provide all the funds required to run universities. He tasked the councils to endeavour to generate revenue outside govwww.businessday.ng

ernment allocations.

Adamu also charged the councils to effectively co-operate with the visitation panels that have just been sent to their universities, whose primary aim is to examine the challenges confronting each university, probe their finances and make appropriate recommendations.

He further tasked them to adopt best practices and comply with statutory guidelines in the performance of their supervisory functions, noting that failure to do so could attract dissolution.

“The councils must ensure

that proper attention and priority is accorded to relevant university laws and government guidelines in the process of such appointments.

Governing councils must ensure that transparency, probity and due process are followed in the selection and appointment processes to ensure the emergence of the best candidates for these positions”, the minister said.

Earlier, the executive secretary, National Universities Commission (NUC), Abubakar Rasheed said the inauguration of the councils signalled a new beginning in the sector.

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overnor Babajide Sanw o -O lu has commended ASP Sunday Erhabor, a police officer attached to the Rapid Response Squad (RRS) of the Lagos Police Command, who was assaulted by one Victor Ebhomenyen at Four- Point by Sheraton Hotel, Oniru last the weekend.

G overnor Sanwo-O lu hailed ASP Erhabor for displaying professionalism and calmness by restraining himself from taking laws into his hands, despite being assaulted while trying to arrest Ebhomenyen for driving against the traffic.

The incident that was captured in a viral video on social media last Saturday; Erhabor while trying to arrest Ebhomenyen for driving against the traffic was violently assaulted and inflicted with severe bodily injuries.

But the police officer, who was armed with his official AK 47 rifle, displayed a high level of professionalism despite the fierce provocations.

Speaking at the Lagos House, Ikeja on Monday while receiving ASP Erhabor, Gover-

nor Sanwo-Olu said the action of the police officer is a testimonial and encouragement for other officers to show that they can be civil in the face of provocation or assault from suspected criminals.

He said: “This is our own little response to the very condemnable events that happened over the weekend. We are all very quick to condemn men of the Nigeria Police, especially when they are found wanting. We are always very quick to also admonish them.

But the event that we all saw over the weekend showed that indeed there are some very commendable Police officers.

“In the real heat of provocation, ASP Erhabor displayed restraint. He displayed calmness and restrained himself from taking laws into his hands. And I think for that little gesture, it is important for us to bring him out so that we also can use him as a testimonial and encouragement for other Police officers to show that indeed they can be civil and that Police are meant to protect our citizens. They are meant to also be law-abiding and the likes of ASP Sunday Erhabor today can be a source of encouragement to others.

Risk managers task members on professionalism HOPE MOSES-ASHIKE

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he Risk Management Association of Nigeria (RIMAN) has urged its new members to ensure due diligence in their various organisations.

This, according to RIMAN, would enable them discharge their professional duties in line with relevant standards guiding the profession.

The call was made during a virtually held membership induction programme where 47 qualified new members were inducted. The lecture centred on ‘Operational Risk Management and Organisational Excellence’.

MKola Ajimoko, 1st vice president, RIMAN, advised the inductees to carry out their corporate activities in their various organisations with due diligence, whilst also upholding the rules and regulations of the association to the best of their capacity.

According to RIMAN the theme was generated from the importance of risk management towards the sustainable development of any organisation’s operations and growth following the impact of the COVID-19 pandemic.

Speaking at the event dur@Businessdayng

ing her keynote presentation, Eneni Oduwole, deputy group Chief Risk Officer and group head of operational risk management, Dangote Industries Limited, pointed out that in other for any organisation to have a successful operational risk management and organisational excellence, it would require they put in place continuous processes which have the engagement of all stakeholders in the organisation.

She noted that such a process must have been defined based on the DNA and culture of the organisation to ensure there is a continuous process to continue delivering top notch products and services to customers.

“By doing so you do not remain on the same level, rather you increase operational capacity and deliverables, which would also help boost customers satisfaction, whilst also delivering the company’s corporate objective. It is important to note that organisational excellence cannot be achieved in one day as it involves a continuous process of efficiency and effective management techniques guided by frame work, standard, procedures and policies.

Tuesday 20 April 2021

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Monday 19 April 2021

Top Gainers/Losers as at Monday 19 April 2021 LOSERS

GAINERS Company

Opening

Closing

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Change

Company

ASI (Points)

38,848.0 4,324.00

Opening

Closing

Change

0.5

0.45

-0.05

DEALS (Numbers) VOLUME (Numbers)

FCMB

2.66

2.92

0.26

FTNCOCOA [RST]

UPL

1.07

1.17

0.1

UNITYBNK [MRF]

0.64

0.59

-0.05

NNFM

5.35

5.85

0.5

UAC-PROP [BLS]

0.79

0.75

-0.04

HONYFLOUR

1.19

1.3

0.11

JAIZBANK

0.64

0.61

-0.03

MBENEFIT [MRF]

0.34

0.37

0.03

AFRIPRUD

5.5

5.25

-0.25

508,637,467.00

VALUE (N billion)

32.10

MARKET CAP (N Trn)

20.33

Global market indicators FTSE 100 Index 7,000.08GBP -19.45-0.28% S&P 500 INDEX 4,164.06USD -21.41-0.51% Generic 1st ‘DM’ Future 33,958.00USD -123.00-0.36%

Deutsche Boerse AG German Stock Index DAX 15,368.39EUR -91.36-0.59% Nikkei 225 29,685.37JPY +2.00+0.01% Shanghai Stock Exchange Composite Index 3,477.55CNY +50.93+1.49%

UBA starts 2021 strong with 27% Q1 profit growth Iheanyi Nwachukwu

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an African financial institution, United Bank for Africa (UBA) Plc has released its unaudited results for the first quarter (Q1) ended March 31, 2021, showing impressive double-digit growth across most of its major income lines.

The bank leveraged on modest growth in both interest and non-interest income as well as increased efficiency to deliver an impressive 24percent year-onyear growth in Profit Before Tax in the first three months of the 2021 financial year, to N40.6 billion compared with N32.7 billion recorded in the first quarter of 2020.

Profit After Tax also grew by 26.8percent from N30.1 billion in March 2020 to N38.2 billion in the period under review. Interestingly, UBA again sustained its strong profitability recording an annualised 20.5per-

Kennedy Uzoka, managing director/CEO, United Bank for Africa (UBA) Plc

cent Return on Average Equity (RoAE) compared to 19.9percent in the same period of 2020.

Driven by a year-on-year growth in interest income, UBA Group recorded another impressive 5.5percent percent year-on-year

growth in Gross Earnings to close at N155.4 billion for the three month period ending March 2021, compared to N147.2 billion recorded in the first three months of last year 2020.

The bank’s total assets also rose by 2.5percent to

N7.9 trillion in the period under review, compared to N7.7 trillion recorded at the end of the 2020 financial year whilst shareholders’ funds grew to N762.4 billion up by 5.3percent from N724.1 billion as at FY 2020.

The Group Managing Director/CEO of the United Bank for Africa (UBA) Plc, Kennedy Uzoka, expressed satisfaction with the Bank’s performance in the first quarter of 2021, stating that the result reflects UBA’s capacity to sustainably grow earnings even in a highly uncertain macroeconomic environment.

He added that the robust capital and liquidity positions have positioned the bank as it continues to support its customers across diverse sectors and markets, guided by prudent risk management practices.

“This impressive 2021Q1 results reflect the capacity of our business to sustainably grow earnings even in a highly uncertain macro-

economic environment.

We remain upbeat on the macroeconomic outlook of the countries in which we operate, especially as the COVID-19 vaccine distribution gains traction globally, whilst commodity prices and currencies continue to stabilise. Our robust capital and liquidity positions have positioned us to continue to support our customers across diverse sectors and markets, guided by prudent risk management practices,” The GMD said.

Uzoka pointed out the bank’s effort towards diligently executing its priorities for the year 2021, as it leverages people, process, and technology to deliver the best customer experience across all its channels and touchpoints, achieving industry leadership and dominance, adding, “The bank is making strong progress in Nigeria where our continuous market share and efficiency gains are translating into higher profits. We are

committed to sustaining this strong start throughout the year, leveraging our customer-First (C-1st) philosophy and unparalleled execution to deliver even stronger returns to our esteemed shareholders in 2021 and beyond;” Uzoka said.

Further breaking down the figures, UBA’s Group Chief Finance Officer, Ugo Nwaghodoh, said, “I am particularly pleased with our annualised return on average equity of 20.5percent and return on average asset of 2percent, as these indices buttress our commitment to delivering sustainable value to our stakeholders. We continued to deploy our balance sheet efficiency and digital-led cost optimisation initiatives to achieve desired outcomes. Cost-toincome ratio improved by 200bps to 60.4percent during the period, whilst cost of funds settled at 2percent, a 130bps reduction from 3.3percent in 2020Q1.

Deputy British High Commissioner engages capital market stakeholders

NOVA Merchant Bank growth trajectory continues

he Deputy British High Commissioner, Lagos, Ben L lew ellyn-Jones OBE, leveraged the Nigerian Exchange (NGX) Limited’s virtual Closing Gong Ceremony to engage capital market stakeholders on Friday April 16, 2021. LlewellynJones was given the privilege to sound the virtual gong to bring the day’s trading activities to a close.

Speaking at the ceremony, the Chief Executive Officer, NGX Limited, Temi Popoola, CFA stated, “I am particularly pleased to be hosting the British Deputy High Commissioner, Lagos, Ben Llewellyn-Jones OBE, as my first Closing Gong Ceremony in this NGX era.

Since the birth of the Lagos Stock Exchange, The British High Commission has remained a partner and supporting institution through-

OVA Merchant Bank Limited has released its audited results for the financial year ended December 31, 2020, recording impressive growth across its major financial lines.

The Bank declared a profit after tax of N3.49billion in 2020 compared to N1.65bn in 2019 which represents a 112percent increase. All the key financial parameters recorded major improvement over the prior year performance; Gross Earnings showed a quantum leap of 130% growth over 2019 and Profit Before Tax at N3.52billion recorded a 135percent growth over the 2019 figure of N1.5billion.

On a similar note, the Bank recorded a decline in the

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out our journey. One of the recent shows of support was in our 2020 International Women’s Day celebration which was graced by Harriet Thompson, British Deputy High Commissioner as the special guest of honour.

In the spirit of continued partnership, I welcome Mr. Llewellyn-Jones to the NGX as I look forward to deepening the partnerships between both organisations to further drive sustainable economic development for Nigeria and Africa as a whole.”

On his part, LlewellynJones stated “It gives me great pleasure to be here today especially given the shared history between the United Kingdom (UK) and the Exchange. History is always with us in the sense that the UK is still very active in the Nigerian market, with Nigeria being the second www.businessday.ng

largest destination for investments and UK business in Sub-Saharan Africa. My role is to not only celebrate that but to grow, encourage and sustain this level participation. Although it has been a difficult year economically and financially, I am encouraged by the resilience, creativity and positive performance of British businesses and investments here in Nigeria and I am grateful for this opportunity to talk about how much the UK will continue to do to support Nigeria and British businesses in Nigeria.”

NGX Limited has expressed that partnerships are a critical element of our strategy at the Exchange and it would continue to engage stakeholders whose support is essential to the achievement of its aspirations in the recently announced NGX era

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Cost to Income Ratio from 55percent in 2019 to 44percent in 2020.

Customer deposits stood at N89.6billion in 2020 compared to N40.5billion in 2019 while loans to customers grew by 71percent to N50billion in 2020 compared to N29.3billion in 2019.

The Managing Director and Chief Executive Officer, Nath Ude, said, “Our full year 2020 performance is especially gratifying as we achieved such growth amidst the unprecedented nature of the COVID-19 pandemic and resulting macro-economic headwinds.”

“In 2021, we will continue to build on our strong foundation to significantly scale the business by focussing on ex@Businessdayng

ceeding the expectations of our customers through innovative financial solutions while expecting our non-bank subsidiaries to start contributing effectively to the group in line with our strategic intent” Ude further stated.

The Chairman, Phillips Oduoza stated, “I am particularly delighted to see how the Bank has maintained its growth trajectory and improve its efficiency during such a challenging period.

Oduoza added “The Bank is well positioned to benefit from the expected upsurge in economic activity and profit from the emerging opportunities this presents as the global economy emerges from the impact of the COVID-19 crisis.”

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How States, LGs are paying for Nigeria’s failure to reform ISAAC ANYAOGU

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he delay by Nigeria’s central government to end the controversial petrol subsidy regime, as well as other long awaited fiscal and monetary reforms means nearly N200billion is locked out of the FAAC allocations every month, according to BusinessDay analysis.

Nigeria runs a federal system of government in which the central government is responsible for monetary and fiscal policy and the federal government also calls the shot when it comes to rules governing the operations of the national oil corporation and the price of petrol.

In this case, the other tiers of government – states and local councils – are made to pay the price of the failure of the central government.

In the Nigerian context, states are so poor they cannot pay workers’ salaries or make the needed investment in the future of their citizens by way of meaningful capital expenditure. In fact, the finances of the states and local councils are getting weaker while the federal government regularly provides them with bail out.

According to data by National Bureau of Statistics, the internally generated revenue of Nigeria’s 36 states and Federal Capital Territory, Abuja, amounted to N1.31trn in 2020 compared to N1.33trn recorded in 2019 indicating a negative growth of -1.93 percent year on year.

By official estimates, it costs Nigeria between N80bn and N100bn monthly by way of the so-called “under recovery”, a new term to describe the unappropriated funds with which Nigeria’s national oil corporation covers the cost of petrol subsidy each month.

What is more, because this cost or spending is not appropriated by the national assembly, it is treated as cost of doing business by the oil corporation and all of this almost N100bn can drop into FAAC’s monthly pot at current crude oil price.

Another reform which can significantly raise the purse available for distribution by the tiers of government is the rate at which proceeds from crude oil export, royalty, petroleum profit tax and dividend from NLNG is converted to the local currency.

Conversion of oil proceeds to the local currency is done today at between N389-N400 a dollar. By simply moving this to a mean of N450/$1, the allocation account of the federation could swell by anything from N80bn to a high of N100bn each month given rising crude oil prices.

According to one senior federal government official, “we have also

seen these numbers. We know that the difference between the current rate of converting FAAC allocation and the so-called mean rate of around N450 to the dollar could theoretically amount to increasing FAAC allocation by as much as one seventh of N600bn. But don’t forget there are also those in Nigeria with a counter argument to adjusting the currency and removing subsidies.”

There are Nigerians who say deregulating petrol price will lead to more poverty in the country where 40 per cent of the people are already living below the poverty line of N385 a day. However, strong as their case may be, pricing petrol at such ridiculously low levels fuels the astonishingly high rate of smuggling across the borders and ensures that governments across the country do no more than just pay salaries of civil servants monthly.

The case can be made that the federal government should not be the one making the decision of what the other tiers of government can and should do with their portion of the subsidy budget. Some states

may choose to invest their share in providing health insurance for their people or build badly needed infrastructure instead of buying petrol for them as the latter benefits only the well to do who can afford cars.

Furthermore, mass transit vehicles, public transportation, trailers and lorries for haulage of goods already run on diesel which is already deregulated and currently retail at N265 /litre.

In any case, this is unsustainable. “It is only a matter of time and imminent implementation that the provisions of the African Continental Free Trade Area Agreement on prohibited and restricted subsidies would catch up Nigeria’s international obligation,” says Wolemi Esan, energy lawyer and partner at Olaniwun Ajayi.

Esan said that whether fuel subsidies are removed now or not, Nigerian’s international obligations would necessitate its removal in the nearest future.

“Rather than wait for that nearest future, it is proactively best that the fuel subsidies are moved to the

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The case can be made that the federal government should not be the one making the decision of what the other tiers of government can and should do with their portion of the subsidy budget

FAAC to address infrastructural deficit in Nigeria, albeit with close monitoring and reporting obligations on the eventual use of the removed fuel subsidies,” he said.

On the adjustment of the Naira, some argue that moving the local currency towards a market determined rate of N480 to the dollar will lead to a further spike in inflation and that prices will go through the roof.

However, a look at the blended rate which leading firms use for pricing their inventory replacement shows that while they used the rate of N360 to the dollar in January 2020, manufacturers were applying the rate of N470-N476 to the dollar as of January this year.

The blending rate is the average rate at which manufacturers access foreign exchange used for importing their raw materials. This is typically the average rate derivable from merging the FX manufacturers secure from official CBN channel with the FX from the parallel market and arriving at an effective rate.

The movement in the effective rate clearly shows that manufacturers in Nigeria get a significantly higher portion of their FX requirement from autonomous sources as confirmed in a survey undertaken late last year by BusinessDay. But perhaps more importantly, the manufacturers already assume an exchange rate of more than N450 for pricing their goods. The reality is that the price of consumer and capital goods in the market are determined by the actual cost incurred by importers and manufacturers, and not determined by government rates.

There is another argument made by those who do not want so much

more money stranded in the hands of the government because it cannot be trusted to do the right thing with money. This set of Nigerians ask the question, “what will the government do with the cash when it has not shown it can be trusted to positively impact the lives of the people.”

Nigeria is projecting a fiscal deficit in 2021 in excess of N4.5trn but this can go down by up to half if the federal government were to apply a more sensible rate for the conversion of Nigeria’s oil proceeds and if subsidy on petroleum products were to be removed or reduced significantly as part of its economic reforms.

This also means Nigerians can be saved the controversy and counter accusations around the so-called printing of money which is a slang globally associated with the ways and means borrowing by governments from their central banks because the government will have more funds available without having to borrow.

In September last year, Timipre Sylvia, minister of state for petroleum said Nigeria could save as much as N1trn annually after abolishing fuel subsidies. Petrol price should be above N200 a litre today and it is difficult to see how Nigeria can survive carrying this heavy subsidy burden, which cost the country N10.7trn in the last 10 years.

Fuel subsidies in Nigeria are enormous according to the UK based International Centre for Tax and Development (ICTD) which has done a comprehensive study of the matter. At last estimate, the state subsidises petrol to the tune of US$3.9 billion a year – more than double the entire health budget.

Such subsidies come at great cost: the opportunity costs of such spending on other development objectives are large; the distribution of resources to the state governments is reduced; the vast majority of the subsidy goes to better-off Nigerians; and cheaper petrol encourages greater pollution, congestion and climate change.

Despite this, surveys show most Nigerians oppose the reduction or removal of subsidies. A new nationally representative household survey by the centre that asked 16,000 Nigerian men and women about their knowledge and attitudes towards subsidies found that 70% were opposed to the reduction or removal of subsides on petrol.

The ICTD study, which was led

by Nel McCulloch, Tom Morenhout and Joonseok Yang found that trust or the lack of it in their government, was a major driver of the opinion of Nigerians many of whom have formed their views regardless of their understanding of the matter.

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