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news you can trust I ** tuesDAY 24 march 2020 I vol. 19, no 526

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Moody’s says naira devaluation to weigh on banks’ asset quality segun adams

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Godwin Obaseki (r), governor, Edo State, with Philip Shaibu, deputy governor, during a press briefing on the steps taken by the state government to ensure the coronavirus is curtailed in the state, at the Government House, Benin City, yesterday.

Nigeria’s best move against coronavirus is worst scenario for millions of poor DIPO OLADEHINDE, SEGUN ADAMS (Lagos) & TONY AILEMEN (Abuja)

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or Tunde Akinloye, a 45-year-old vulcaniser in Apapa, Lagos State, Nigeria’s best defence against the COVID-19 would be the worst scenario for him and his family of eight who

FG urges Lagos, Abuja residents to stay at home

depend on his N5,000 a day income for survival. “I learnt that the government is encouraging people to stay indoors and avoid public gatherings. I can’t, man must wack,” Akinloye told BusinessDay,

explaining that a stay-at-home would mean hunger for his family. Nigeria is yet to announce a full lockdown like India, but the Federal Government on Monday closed all land borders, suspend-

ed all government meetings and urged all Abuja and Lagos residents to stay at home, avoid mass congregation of any kind as well as non-essential outings unContinues on page 34

weaker naira puts negative pressure on the asset quality of Nigerian banks, Moody’s said on Monday, after the Central Bank of Nigeria (CBN) adjusted the naira by 4 percent on the Investors’ and Exporters’ (I&E) FX Window. The CBN on Friday quoted naira at N380 per dollar from N365 in the I&E window, while the official exchange rate was allowed to depreciate by 15 percent to N360 per dollar from N306. Moody’s told Bloomberg that the move “will put negative pressure on Nigerian banks’ asset quality and capital metrics as they have a high proportion of foreign-currency denominated loans”. While a weaker naira increases Nigerian banks’ risk weighted assets related to their foreign currency loans, the Continues on page 34

Inside

Mixed expectations as MPC decides on interest rate today P. 2 Brimming storage, huge production, low demand – oil market braces for arduous April P. 2


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news Mixed expectations as MPC decides on interest rate today

BUA Group acquires majority interest in PW Nigeria Ltd

… Dollar sells for N400 on black market after CBN adjusted FX

UA Group, one of Africa’s largest infrastructure companies, has announced its acquisition of majority shareholding in PW Nigeria Limited. According to BUA, this was necessary to further deepen its investments in the infrastructure business in sub-Saharan Africa. “This acquisition marks the beginning of the next phase of our medium-term strategy for our infrastructure business following the completion of the consolidation of our cement arm, BUA Cement, in January 2020,” Abdul Samad Rabiu, executive chairman of BUA Group, said. Rabiu said BUA’s acquisition of majority holdings in PW Nigeria Limited, one of Nigeria’s largest construction, engineering and mining companies, provides a prime opportunity for the company to increase its investments in the entire value chain of the cement, mining and construction industry where it already has BUA Cement plc, the second largest cement company in Nigeria, as well as investments in other areas including mining, quarrying, construction, power and logistics, amongst others.

HOPE MOSES-ASHIKE & BUNMI BAILEY

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inancial analysts are divergent in their expectations as the Monetary Policy Committee (MPC) will today (Tuesday) announce its decision on benchmark interest rate at its 272nd meeting in Abuja. This comes as the foreign exchange pressure resumed on Monday. The dollar sold at N400 on the black market after the Central Bank of Nigeria (CBN) adjusted the currency to N380/$ at the Investors and Exporters (I&E) forex window at the weekend. Buying price for dollar on

Monday was N390 across Lagos black markets, but selling price differed. For instance, dollar sold at N400 at Festac Town, while in Apapa area of Lagos, it sold at N397. The CBN had last week issued a circular on weekly exchange rate disbursement of proceeds of International Money Transfer Services Operation (IMTSO) among dealers. Exchange rate from IMTSOs to banks is put at N376 per dollar, from banks to CBN at N377/$, CBN to BDCs at N378/$, and BDCs to end users not more than N380 per dollar. Some of the analysts polled by BusinessDay expect

the CBN to maintain a status quo on the Monetary Policy Rate (MPR), while others anticipate a cut. In the face of increasing inflation and declining oil price, the MPC might likely hold rate while encouraging the CBN to continue the use the instrumentality of intervention funds, Cash Reserve Ratio (CRR) and Loan to Deposit Ratio (LDR) in galvanising the economy, said Akintunde Olusegun, financial market analyst at Polaris Bank Limited. The CBN last week cut interest rates on all its applicable intervention facilities from 9 percent to 5 percent per annum for one year ef-

fective March 1, 2020 and also granted a further moratorium of one year on all principal repayments. In view of the success of the LDR policy in growing credit to the economy and reducing interest rates, the CBN said it would further support industry funding levels to maintain banks’ capacity to direct credit to individuals, households, and businesses. Uche Uwaleke, professor of finance and capital markets, Nasarawa State University, does not see the MPC effecting any rate cut. On the other hand, he said a rate hike at this period would be at vari-

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Ahmed Dangiwa (r), managing director, Federal Mortgage Bank of Nigeria (FMBN), presenting a souvenir to Aliyu Wamakko, president, Real Estate Developers’ Association of Nigeria (REDAN), during the latter’s visit to FMBN’s headquarters in Abuja, yesterday. NAN

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storm of epic proportions is gathering in the oil market where storages are brimming and top producers test the limit of self-immolation in a senseless price war, while consumers hunker down at home over a dangerous pandemic, setting the stage for an arduous April. According to a study by Rystad Energy, a Norwegian independent energy research and business intelligence company, the largest oil supply surplus the world has ever seen in a single quarter is about to hit the global market from April, creating an imbalance of around 10 million barrels per day (bpd). The firm’s research

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“We believe PW Nigeria Ltd with its solid experience in building dams, roads, airports, water projects and other infrastructure projects in Nigeria provided a strong value proposition too difficult to ignore,” he said. Rabiu said as Nigeria and most of West Africa look to improve infrastructural developmentincomingyears,itbecame imperative for BUA to position itself strategically to support criticalinvestmentsandgovernment effort and unlock latent opportunities in the infrastructure development space. The acquisition of PW Nigeria extends BUA’s investments, leadership and capacity in the infrastructure space and projects are expected to benefit from a tight integration of BUA’s cement business and PW Nigeria’s construction business. Originally founded in 1948 in Ireland, and later began operations in Nigeria in 1974, PW Nigeria Ltd has now over 45 years of experience working in Nigeria and throughout the West Africa region. PW Nigeria Ltd has an extensive modern fleet of construction equipment and a team of highly trained and professional staff. It is highly committed to the continued development of Nigeria.

FG to provide more clarity on cargo flights ban after BusinessDay’s report IFEOMA OKEKE

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Brimming storage, huge production, low demand – oil market braces for arduous April ISAAC ANYAOGU

BALA AUGIE

Analysis analysis shows that global storage infrastructure is in trouble and will be unable to take more crude and products in just a few months. “Our current liquid balances show supply surpassing oil demand by an average of nearly 6 million bpd in 2020, resulting in an accumulated implied storage build of 2.0 billion barrels this year,” Rystad Energy said. “Based on our rigorous analysis, we find that the world currently has around 7.2 billion barrels crude and products in storage, including 1.3 billion to 1.4 billion barrels currently onboard oil tankers at sea. We estiwww.businessday.ng

mate that, on average, 76 percent of the world’s oil storage capacity is already full,” it said. There is essentially no idle storage capacity available on tankers, as Saudi Arabia and other producers might have already wiped out the available population of Very Large Crude Carriers (VLCC) for March and April 2020, the company said. The current rate of output, according to the company’s research, shows that using an estimated average 6.0 million bpd of implied oil stock builds for 2020, in theory it should take nine months to fill all onshore tanks, now they expect them to fill up within a few months. So not only would the world have outsized oil

production with some of the lowest demand it has seen in decades, it won’t even have where to store them. “The current average filling rates indicated by our balances are unsustainable. At the current storage filling rate, prices are destined to follow the same fate as they did in 1998, when Brent fell to an all-time low of less than $10 per barrel,” said Paola Rodriguez-Masiu, Rystad Energy’s senior oil markets analyst. But this reality has done little to assuage Saudi Arabia and Russia who have squared off in a price war that is fast looking more like a contest of bloated egos than reasoned response to a failing trade deal.

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he Federal Government will be providing more clarity on which cargo flights will be banned and which will be allowed into the country amid efforts to contain the ravaging coronavirus pandemic, a source at the Nigeria Civil Aviation Authority (NCAA) told BusinessDay on Monday. The government had on Saturday, through NCAA, said it would shut down Lagos and Abuja airports to international flights from Monday, March 23, and Sam Adurogboye, NCAA’s spokesperson, had confirmed to BusinessDay that cargo flights would also be banned from coming into the country. Questions have, however, been raised regarding how Nigeria would fight the ravaging pandemic if it closed the airports to essential cargoes, with some commentators asking for clarity. BusinessDay had on Monday reported that crisis may be in the offing if the Federal Government did not relax its ban on cargo flights to Murtala Muhammed International Airport (MMIA) in Lagos and Nnamdi Azikiwe @Businessdayng

International Airport, Abuja. The ban is coming at a point when Africa’s most populous country is facing shortages of face masks, surgical masks and ventilators amid increasing number of Nigerians with the deadly coronavirus. But the NCAA source, who craved anonymity, said the Federal Government would have to provide more clarity on the situation soon considering the fact that cargoes are essential for health and pharmaceutical supplies to help fight the virus. He explained that medical and pharmaceutical cargo flights may still be allowed to operate. “The problem is that an entire flight cannot carry just medical cargoes. It is usually a mixture of several types of cargoes and if a cargo flight is not full to a certain level, then it may not be justifiable operating the flight,” the source told BusinessDay. “As a result, the NCAA is in talks with the Federal Government to provide more clarity on the issue. The Ministry of Aviation reports to the presidential task force. The presidential task force is the only one to make a statement with regard to this issue,” the person said.


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news Coronavirus: Owners of private schools defy holiday orders in Lagos COVID-19: Capital projects suffer as Ogun moves to reduce N449bn 2020 budget … recurrent expenditure may be favoured against capex

… as schools conduct classes for SSS3, JSS3 students MARK MAYAH

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ome owners of private secondary schools in Lagos and Ogun states on Monday, defied holiday orders by the state governments as classes resumed for Junior Secondary School (JSS3) and Senior Secondary School (SSS3) students. Investigations by BusinessDay reveal that, proprietors of these schools had last Friday directed the students to be reporting to classes as to prepare them adequately for their WAEC and Junior WAEC examinations, respectively. A visit by our correspondent to some of the schools situated at Alimosho, Agege, Ifako/ Ijaiye, Ikeja and Mushin local government areas of the state, confirmed the presence of the students in their respective classes to begin the day’s procedure.

The schools visited are: Ifako International School, Providence School Ifako, Jelly-Las International School, Agege, Starland Schools, Ogba, and Dansol High School, Ikeja. Lagos State government, as part of the preventive measures against the spread of coronavirus pandemic, had on March 19, directed closing down of all public and private schools beginning from Monday, March 23, 2020. “The move became necessary to prevent our children and their teachers from becoming more vulnerable to the pandemic. “Children should be encouraged to remain at home. The closure is not intended to create panic but to arrest the spread of the disease, which has become a global threat,” the statement said. But, some of the teachers, who spoke with our correspon-

dent on why they opted for classes defying government directive to stay at home, said, ‘’We need to prepare our candidates adequately for both examinations. ‘’The government took decisions without consulting owners of private schools who by all standard are stakeholders. Parents pay heavily to have good academic procedure for their children. We can’t afford to disappoint,’’ said a teacher. However, an official of the state ministry of education, who did not want her name in print, told BusinessDay that government ‘’will see to it that the directives by the government are strictly adhered to by all schools. ‘’A task force on compliance as well as law enforcement personnel will be drafted to all the 57 local government and local council development areas in the state to enforce the directive in the schools.’’

Monarch urges support for government’s action, cancels festival CHUKA UROKO

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s the coronavirus fears spread with governments across the globe taking far-reaching decisions and actions aimed at checking the spread, a Lagos monarch has also taken action in the interest of his subjects. The monarch, Ishola Animashaun, the Paramount Ruler of Epeland, has cancelled the annual

Ebi Festival, which is one of the notable cultural festivals in the community already scheduled to commence on Sunday, March 22. Oba Animashaun, at a media briefing in his Epe Palace on Sunday, explained that the decision to cancel the annual festival became imperative owing to the state government’s decision to ban social gathering in a bid to contain the spread of the coronavirus in the state. “In view of the measures put

in place by the Lagos State government to curtail the spread of the disease, especially the need to avoid social engagements of any type, the Oba-in-Council thought it necessary to cancel the festival and support the government in its efforts to save people’s lives,” he said. The monarch therefore urged all residents of Epe in particular and Lagos State in general to keep to the measures put in place by the government.

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RAZAQ AYINLA, Abeokuta

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gun State, with little or no financial buffers, may suffer the harsh impacts of economic turmoil and falling oil price as a result of coronavirus in terms of budget performance for 2020 fiscal year, since government has declared move to make a downward review to N449.97 billion fiscal estimates approved for the year 2020. Recall that the state designed a three-year Medium Term Expenditure Framework for which the benchmark for capital expenditure is put at 60%, 65% and 70% for fiscal years 2020, 2021 and 2022, respectively; inflation rates pegged at 10.2%, 8.49% and 6.59% for three years and gross domestic product contributions stand at 2.4% of N2.99 trillion for 2020; N3.06 trillion for 2021 and N3.14 trillion 2022. Whereas, sources of 2020 budget finance, which include N255.946 billion of IGR - 57% of the budget; N43.431 billion of Statutory Allocation - 10%; N22.031 billion VAT 5%, and N129.566 billion of Capital and other Receipts - 28% may not be realised to effectively finance the budget as company shares and government bonds and securities are getting flat. This is as Nigeria’s local and

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foreign earnings are seriously dwindling, which will definitely have negative impacts on IGR, VAT collections, Statutory Allocations, Capital and other receipts, except some fiscal palliatives as well as financial mechanisms are devised to shore up the budget. Therefore, N271.2 billion budgetary allocations for capital expenditure, representing 60.3%, may suffer abysmally in favour of N178.8 billion recurrent expenditure, representing 39.7% going by Governor Dapo Abiodun’s pledge to start paying N30,000 minimum wage to state workers as well as proposed emergency funds being considered for the clinical consumables against COVID-19 and other health challenges that are troubling the country and Ogun state in particular. Making an official statement on the current economic realities staring government on the face, Governor Abiodun at the weekend rolled out measures to tackle the economic effects of COVID-19, saying: “As a result of the recent global economic challenges resulting from COVID-19 pandemic and the crash in the prices of crude oil, a number of measures have been announced to mitigate the imminent reduction in monthly FAAC allocations from the Federation Accounts.” The governor reeled out @Businessdayng

these measures while receiving the Interim Report of the State’s Economic Team led by the Commissioner of Finance and Chief Economic Adviser, Dapo Okubadejo, saying: “Some of the measures devised include budget review, restructuring and refinancing of existing loan obligations and processing of new credit facilities to improve the State’s cash flow and take advantage of the more favourable interest rate regime in the country.” Confirming government’s position on economic realities through an official press statement issued by Kunle Somorin, the chief press secretary to Governor Abiodun in Abeokuta at the weekend, explained further that “other initiatives include creatively shoring up internally generated revenue, eliminating leakages and aggressive cost reduction, especially recurrent cost. “Also recommended are enhancing accountability and transparency and strengthening the Government Delivery Unit to ensure efficient and effective delivery of projects and policies. Furthermore, government would prioritise spending on its focal areas such as agriculture, healthcare, infrastructure, and other projects that will enhance the living standards of the citizenry.”


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COVID-19: Fighting an invisible enemy without weapons

STRATEGY & POLICY

MA JOHNSON

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cholars of military history may recall that on 8 July 1853, a certain Commodore Matthew Perry of the United States Navy sailed into Tokyo Bay. Popularly referred to as the Perry Expedition, the Commodore had under his command two steamships and two sailing vessels which set sail from the USA on diplomatic and military expedition to Bakumatsu period, Japan. Perry’s primary goal was to force an end to Japan’s 220-year old policy of isolation, and to open Japanese ports to American trade, using gun boat diplomacy, if necessary. On arrival at Tokyo Bay, the one-star admiral landed a squadron of heavily armed sailors and marines; he moved one of the ships brazenly up the harbour, apparently in the show of force so that more people could see the naval ships. While in harbour, the Commodore delivered a letter from President Millard Fillmore, the 13th President of the United States, to Emperor Komei of Japan. As they left, Perry’s fleet fired guns into the ether. In the port, people were terrified: “It sounded like distant thunder,” a contemporary diarist allegedly wrote at the time, “and the mountains echoed back the noise of the shots. This was so formidable that the people in Edo (modern Tokyo) were fearful.” It was not only the noise that frightened the Japanese. The Perry expedition famously convinced them that their political system was incapable of coping with new kinds of threats. Secure in their homeland, the rulers

in Japan were convinced for decades of their cultural superiority. Japan was unique, special, and the homeland of the gods. Three decades before the arrival of the steamships and the guns, Japan was regarded as the “standard of the world” by a nationalist thinker Aizawa Seishisai. It was then, the Japanese suddenly realized that their culture, political system and technology were out of date. Their samurai-warrior leaders and honour culture were not able to compete in a world dominated by science. Science, is “the intellectual enterprise concerned with providing an accurate account of the objects, processes and relationships in the world of natural phenomena.” It is a field of knowledge, parts of which are unplotted. Unlike technology, science is not necessarily concerned with improving the quality of life or coping with the environment. If science was necessarily concerned about improving the quality of life, an offensive bioweapon such as the COVID-19 would not have been created. One Francis Boyle, creator of the Bioweapons Act in the USA, was alleged to have said that the 2019 Wuhan Coronavirus is an offensive Biological Warfare weapon. Francis Boyle, the professor of international law at the University of Illinois College of Law believes that the World Health Organization (WHO) knows about it. Oh no! Can this be true? Does it mean that the world less North Korea, is combating an engineered virus? North Korea has not recorded any case. Or is North Korea deliberately covering up information on the deadly virus? It is unimaginable that the world is fighting an unknown enemy in a globalized world. Francis Boyle, believes according to unconfirmed sources, that the virus is potentially lethal and offensive biological warfare weapon or dual use biowarfare weapons agent genetically modified with gain of function properties. That was why, the erudite professor and human right activist reportedly says the Chinese government originally

tried to cover up the outbreak of the deadly disease. And has now taken drastic steps to contain it. Anyway, Dr Boyle’s position is in stark contrast to the mainstream media’s narrative of the virus being originated from the seafood market in Wuhan, which is increasingly being questioned by many experts. Once in the whole world everywhere is quiet. The world is quiet not because man likes quietness. No more war; no terrorist bombing and screening at airports? There appears to be peace everywhere except fear. Or could it be that the media, both international and local are not focusing on wars now? What has suddenly happened to Boko Haram in the past few days in Nigeria? What about kidnappers and bandits? It appears these criminals have changed tactics in pursuit of an invisible enemy. The only invincible enemy not to be underestimated is COVID-19. Afterall, the fear of COVID-19 is the beginning of wisdom. This deadly virus has made everyone to be quiet and cooperating and learning from each other peacefully. COVID-19 bluffs all nations- powerful and less powerful- they are all combating a common enemy. Although, the coronavirus is in its early days, the scale and force of global and economic crisis that has hit the world may turn out to be as formidable as Perry’s voyage was. The world is at war without weapons. Italy is the worst hit with over 4000 deaths so far. The healthcare systems, bureaucracy, political systems of rich and poor countries make the world as fearful as the Japanese who had the “distant thunder” of Perry’s naval gunfire. An invincible enemy has infiltrated the global arena. No nation is spared from the collateral damage inflicted by the virus. Countries that long used to thinking that they are the most developed, most efficient, and most technologically advanced have been badly exposed by the deadly COVID-19. The “giant of Africa”- the most populous black nation in the world is not exempted. Suddenly,

Once in the whole world everywhere is quiet. The world is quiet not because man likes quietness. No more war; no terrorist bombing and screening at airports? There appears to be peace everywhere except fear. Or could it be that the media, both international and local are not focusing on wars now

governments in most countries have realized that they are not as good as they thought they are. Now that human life is threatened globally, scientists are working tirelessly to ensure that lives are saved. As I write, the information highway is busy with a large flow of ideas on how the invincible enemy can be destroyed. We are witnessing “infodemic”. The WHO defines an infodemic as a situation where there is an “over-abundance of information- some accurate and some not- that makes it hard for people to find trustworthy sources and reliable guidance when they need it.” In the face of global panic, the WHO is battling misinformation. There is panic which has gone global. The engine of panic is the social media. All over the world, people are spooked. Even at a few Shoprite outlets in Lagos, there is supermarket punch-up as shoppers fight over last packets of pasta and bottled waters. Very many thanks to Mark Zuckerberg, who on his Facebook page, says “We’ve worked with the WHO on a way to get authoritative information about coronavirus sent directly to your WhatsApp.” There is no doubt that digital technology is playing a profound role in how we respond to the world, and to crises in particular.” It is not only about how we grapple with a phenomenon as disparate as panic that manifests across such vastly different scales- from a supermarket brawl to the swings of the global market - but also about why it is that everywhere trust in institutions of governance is eroding as fast as panic takes hold. So, what is the cure against this invincible enemy? No one can say for sure as at 20 March 2020. Globally, there is rumour that chloroquine can destroy the virus. As chloroquine undergoes clinical trials for COVID-19, social distancing should be taken seriously, according to experts. Thank you! Johnson is an author and a retired naval engineer who has passion for African development and good governance

Why Nigeria’s transportation sector should be the hub for global investments

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igeria is a highly populated country of over 200 million people and currently the largest economy in Africa with a gross domestic product (GDP) of $446.543 billion (2019); the population is quite diverse which gives room for potential growth of the economy. The 1973 oil boom pushed the transportation sector to a point where both infrastructural and transportation improvements became high in demand thereby necessitating the quest for knowledgeable business partners and investors that are ready to explore and tap into the abundant opportunities available within the sector. This stirred up the need for constant improvement, upgrading and opening up of the transportation sector of Nigeria. The enormous resources available in the sector are yet to be fully harnessed and are still very much in the low developmental stages, for example the quality and standard of public bus and rail system as obtained mostly in the developed nations are not fully available in Nigeria. The government of today on resumption of office started investing heavily in railway, agriculture and information technology as a way of boosting and opening up the economy to improve global competitiveness and attract more investment opportunities to the economy, although previous governments never gave the sector much attention ,commendation must be given to this present government for all its efforts so far in revamping and building the sector. Transportation sector contribution to the nations GDP increased to $720.241 million in the

third quarter of 2019 from $642.927 million in the second quarter of 2019 and contributed 2.49 percent to nominal GDP in Q1 2019, an increase from 1.85 percent recorded in the corresponding period of 2018 and higher than 2.05 percent recorded in the fourth quarter of 2018. Apart from crude oil, Nigeria is blessed with diverse natural resources such as gas, tin, iron ore, coal, limestone, lead, zinc, arable land, deep ocean, vast seas which are worth billions of dollars and there can be no denying the fact that there are tremendous opportunities available for foreign investors in Nigeria’s transportation sector (railway, pipeline, airways, maritime and land),this also includes Agriculture, communication ,Power ,tourism, consumer goods, textiles, entertainment, sports are other good investments areas for consideration. There are two ways for investors to look at investment opportunities in Nigeria Transportation sector, they are foreign portfolio investments which includes investing in stocks and securities of an existing Nigerian Transportation company (Railway, Maritime ,Air, pipeline and Road transportation) or foreign direct investments (FDI) which involves establishing a business organisation and acquisition of business assets and also playing actively in transport businesses in Nigeria. Some examples of nations that have benefitted from this type of strategy of developing their economies by attracting international investors are USA, UK, China, Netherlands, Ireland, Brazil, Singapore, Germany, India and France Our government in Nigeria must begin to take active steps to improve our economy in key areas www.businessday.ng

that can positively attract FDI, such as improving wages rates, labour skills, tax rates, availability of modern transport infrastructure, size and potential for growth of our economy, political stability, exchange rate, access to free trade areas and streamlining the process for organisations interested in doing businesses in Nigeria, such company must also be incorporated as a separate entity in Nigeria or have a local company as partners or be exempted by the President of Nigeria if it is not incorporated according to the Nigerian law. The economy of Nigeria some years ago came out of recession caused by low oil revenue and because of lack of strong diversification strategy in other key sectors of the economy. However, the government made strong policy decisions through determination which helped to rekindle and reposition the economy to be the largest economy in Africa. The Nigerian Bureau of Statistics reported that capital inflows, foreign direct investment, portfolio and other investments reached $12 billion in 2017 majorly as a result of policy changes and improvement in the oil sector. There are a lot of components that can influence the level of foreign investments into the Nigerian economy and transportation sector, one of such is the large consumer market. The Nigerian government also provided a number of incentives related to taxes, exports changes in policies and other key factors to boost more investments opportunities from within and outside the country to ease doing business in Nigeria. The process of registering a business has also been simplified, the free flow of investments capital and freedom from expropriation

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Festus Okotie of investments has further boosted Nigeria as an investment hub and investors are now allowed to freely repatriate their capital and net profit after tax without any restrictions provided, there is also evidence of certificate of capital importation(CCI) which is an evidence that their investment came into the country. The system is generally very simple and transparent. The increase in the influx of direct investment in Nigeria has been a crucial factor in the economic growth of the country and has facilitated improvements in the working population through transfer of knowledge and technical skills which has aided the quality and standardisation of processes and products ,infrastructure development ,generation of revenue through taxation that has encouraged exports of locally produced goods.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Okotie, a maritime transport specialist, writes via fokotie. bernardhall@gmail.com, Fokotie@bernardhallgroup. com

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Good economics for African times (2) Rafiq Raji

“Growth is hard to measure. It is even harder to know what drives it, and therefore to make policy to make it happen” (Banerjee & Duflo, 2019). he obsession of the rich world’s economists with growth is understandable: growth has been anaemic in those parts for decades. And even with all sorts of unorthodox interventions, from quantitative easing to yield curve control, the needle has barely moved. The conventional wisdom is that technological innovation and population growth should engender economic growth. While the latter has almost certainly been slowing – negative even – in the rich world over time, the same cannot be said of the former. Still, the internet, artificial intelligence and many other productivityenhancing technological feats of our time have surprisingly not been as revolutionary for growth like better and more education, electricity, the internal combustion engine, and others, were in the past.

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There is a school of thought that believes trying to determine why this is the case is needless. This is because the answer may be more a child of time than effort; a sentiment echoed by Banerjee & Duflo: “Mostly, what is clear is that we don’t know and have no way to find out other than by waiting”. Thus, as the duo also reckon, “the most important question we can usefully answer in rich countries [at this time] is not how to make them grow even richer, but how to improve the quality of life of their average citizen.” African countries are not in the same boat with their rich counterparts in this regard; albeit 1-2 percent growth by its two largest economies in recent years makes you wonder aloud about that a little bit. Still, the authors agree: “It is in the developing world, where growth is sometimes held back by an egregious abuse of economic logic, that we may have something useful to say, though, as we will see, even that is very limited.” No set path to growth Economic growth is driven by skilled labour and capital; both of which are abundant in rich countries but scarce for the latter or imbalanced in poor countries. Adjustments to these variables can still result in significant shifts in growth and development for developing countries. For rich ones, however, what would be similarly impacting would have to be the kind of technological progress that makes already abundant skilled labour and

capital even more productive. And while technological innovation is seemingly abundant, it has surprisingly not been as growth-enhancing as imagined. There are arguments about whether this is the case because we are measuring growth wrongly. That is not our focus here, however. Industrial policy was hitherto frowned upon by conventional economists and policymakers. And yet East Asia’s success on the back of it is hard to ignore. This is a point Reda Cherif and Fuad Hasanov of the International Monetary Fund (IMF) make in their March 2019 working paper aptly titled “The Return of the Policy That shall not be named: Principles of industrial policy”. They highlight how “True Industrial Policy” or “Technology and Innovation Policy” is a formula for growth when it abides by the following three key principles: (i) state intervention to fix market failures (ii) export orientation and (iii) the pursuit of fierce domestic and international competition. I do not agree or disagree with their thesis. Instead, my goal is to show how what may be considered crude, illinformed, or voodoo economics at the outset could later be celebrated by the same ex ante detractors. More fundamentally, it is evidence, like Banerjee & Duflo suggest, and as has been wellknown in academic circles for ages, there is no one strategy for growth. Banerjee & Duflo have a view on the East Asian example: “Those who

African countries are not in the same boat with their rich counterparts in this regard; albeit 1-2 percent growth by its two largest economies in recent years makes you wonder aloud about that a little bit

herald the experience of the East Asian countries to prove the virtue of one approach or the other are dreaming; there is no way to prove any such thing. The bottomline is that, much as in rich countries, we have no accepted recipe for how to make growth happen in poor countries.” The appropriate lessons from all these is not so much that because some form of state-driven economic development is now acceptable to the IMF, African countries should suddenly now see this as appropriate for their own development. Instead, the lesson is that an economy must decide for itself what it needs to do to achieve sustainable development. Ponder this for a minute. Had the Asian countries now being celebrated taken the advice of the IMF and others to liberalise their economies and jettison state intervention, would they be the ‘miracle’ they are today? It is a rhetorical question. As Banerjee & Duflo assert, “the bottomline is that despite the best efforts of generations of economists, the deep mechanisms of persistent eocnomic growth remain elusive.” Thus, my advice to African countries is to think independently about their respective situations and doggedly pursue the strategies they decide on. “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

COVID-19: Hidden advantage for SMEs

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he coronavirus (COVID-19) outbreak is now contagion and uncertainty abound. The coronavirus has officially been declared a pandemic by the World Health Organization, on March 11, 2020. As of today 20th March, the number of coronavirus cases confirmed is 250,625 with more than 10,000 deaths from the disease. Outside of China, cases have been reported across over 100 countries, most conspicuously Italy and Iran, but also including the UK, the US, Australia, France, and Germany, with infections and deaths increasing worldwide. This has caused continued apprehension and distortion in the way of life and business landscape. In Nigeria, we have recorded 27 positive cases as at Sunday and the contact tracing of 1,300 people ongoing as of 20th March 2020. With this development, there are speculations that we might have a spike in the number of cases due to a high sense of community transmission of the virus. With the government reactions, it is an indication that we are now coming to terms with the reality of the coronavirus incident in Nigeria. Government has ordered closure of all schools, devalued the currency, shut airports, issued travel bans to some countries, restrict government officials’ trip abroad and prohibited gatherings of above 50 people in the interest of all. All because the coronavirus outbreak is taking a toll on the citizenry, economy, international trades, stock markets, and businesses. Even at that, the outbreak of coronavirus continues to disrupt global supply chains and financial markets globally. Our business environment in Nigeria is likely to experience a drastic change in the coming weeks with the emergence of new cases and the ongoing contact tracing nationwide. Therefore, the way businesses will be operated in the coming days will likely experience disruptions. The stock market which is an economic barometer has been experiencing bearish trends globally since the beginning of the year with the growing concern of the coronavirus pandemic. The Nigeria All Share Index (ASI),

a measure of stock market performance as plunged by -17.75 percent year to date and market capitalization has equally dropped to N11.505.70 trillion respectively as of 20th March 2020. To put it in the right context, these economic indicators mirror businesses and company performance in the country. Correspondingly, when the performance of the stock market is weak or poor it means investors are losing value and market value of the listed companies is equally experiencing diminution. The performance of the stock market is largely determined by the wellbeing of these listed companies which are generally affected by cycles or disruption in the economy including Small Medium Enterprises (SMEs). Most companies globally are already feeling the impact of the COVID-19 outbreak and this is one of the major reasons for the decline in the stock market performances. However certain sectors and companies are more exposed to the risk of coronavirus than others, the airline and hospitality businesses are majorly hit and are finding it difficult to operate. Similarly, consumer goods firms are facing heavy disruption in their supply chain and restocking. But while revenues and business forecasts are set to suffer short-term pressures and declines, one of the ways to cushion the effect of the pandemic and manage the impact on businesses is through technology adoption and remote communications, which is mainly by e-commerce adoption. Electronic commerce or simply e-commerce, can give the needed hidden upside for businesses because it relies on various information and communication technologies (ICT), and it has the potential to improve trade efficiency and improve business performance, while this COVID-19 disruption persists. The use of technology will allow the automation of common processes in business, such as distribution, sales, after-sales service, and inventory management. The marketplace for business transactions will be extended beyond traditional boundaries with the adoption of e-

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Commerce. The necessary shopping, bargaining, and transactions can take place anywhere and businesses can be accessible everywhere and anywhere in Nigeria with the adoption. Be sure that the e-commerce platform will give your business the digital visibility and the safety required during these trying times. Obviously with this strategy adoption and adequate use of the e-commerce platform will provide compliance to the widely publicized precautionary measures especially social distancing and no-touch greetings. Besides, customer convenience will be enhanced and the shopping cost will similarly be reduced. Transactional and operational costs of an online businesses are lower than the traditional brick and mortar businesses. Therefore, SME operators can showcase, transact and sell anything, even perishable items, such as fresh tomato, chicken, and so on the platform. In essence, e-commerce will provide the platform for businesses, irrespective of their size or number of employees to contain with the COVID-19 limitations and continue to transact despite the government restrictions. The e-commerce platform is a technological advancement tool for business for SMEs to offer attractive prices for their goods and services, build their reputations, and overcome the COVID-19 limitations. SME operators are able to connect with their target customer, business partners in a timely and efficient manner nationwide and internationally. Commercial activities are aided faster and online payment solutions support the effective usage of the e-commerce. Therefore, be informed that the electronic nature of this type of transaction will allow businesses to execute high transactions on a day to day and 24 hours basis without any physical contact. Likewise, it is convenience for clients to transact online because it will save them the stress of transportation, car parking cost, the reduction of the risk of coronavirus contacts and so on. The e-commerce platform guarantees an opportunity to break free of the limitation that physical outlets, offices, and

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Timi Olubiyi shops provides. It will equally enable SMEs to transact beyond their neighborhood or geographical location. E-commerce can expand SME networks across geographical borders to reach a greater number of states and even countries However, according to sampled opinion some obstacles may obstruct SMEs getting into e-commerce, some of which are: enterprise’s goods or services not being suitable, problems related to logistics, problems related to payments and so on. It is believed that these issues can be handled if the right assistance is sought on time. By adopting e-commerce, SMEs stand to benefit from increased revenues and sales, improved market reach, access to new markets and cost savings in marketing and communication expenditure Therefore, the ability to incorporate new strategies such as e-commerce quickly and flexibly will be a key strength that will set SME operators including young entrepreneurs, women in business, agriculturalist, manufacturers and business executives apart during this period. The adoption of digital trade through of e-commerce, social media marketing services, website design and development, mobile application development are able to widen market access of goods and services and change the shopping and business transaction landscape in Nigeria during this COVID-19 era and beyond. Dr. Olubiyi holds a Ph.D. in Entrepreneurship and Small Business Management. He is a prolific investment coach, Chartered Member of the Chartered Institute for Securities & Investment (CISI) and a financial literacy specialist. He can be reached on the twitter handle @drtimiolubiyi and via email: drtimiolubiyi@gmail.com.

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Tuesday 24 March 2020

BUSINESS DAY

EDITORIAL Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya

Containing the spread of coronavirus Nigeria quashed Ebola, curtailing covid-19 will demand more

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

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s the number of cases with covid-19, the novel coronavirus, rises in Nigeria implementing measures required to contain the deadly virus such as rapid testing and social distancing will test how fast government authorities and health facilities can stop it from spreading. Because there is no immunity and no vaccines yet, the best means to prevent it from spreading is to reduce close contacts. Social distancing strategy which delays and reduces personto-person transmission of the virus is applied on the individual and community level. For individuals, it involves non-contact greetings, keeping a one metre distance between people, staying home if ill. At the community level it involves closure of events where people gather together: schools, sports, entertainment, parties, churches and mosques. Some measures have been taken such as shutting interna-

tional air travel (which began yesterday) limiting social gatherings to no more than 20 people and the closure of schools, bars and nightclubs. These actions were taken swiftly after 9 of the 10 new cases announced on Saturday, 21 March arrived Lagos within the week. Lagos, the commercial nerve centre of Nigeria, is densely populated. Millions live in cramped slums, have no access to water and have to work daily to earn a living; basic hygiene is a luxury. Add to that the misinformation about the virus and the lack of trust in government authorities. It will take a well thought out plan to enforce social distancing. To counter public distrust the government must find credible people to lead its campaign to inform people about how contagious and lethal covid-19. It must work with religious leaders to communicate the benefits of community social distancing – large mass gatherings were people are close contact for hours are the perfect vehicle for spreading the virus within the community.

But time is running out. A community outbreak will overwhelm the already stretched officials of the Lagos State Ministry of Health, and the Nigeria Centre for Disease Control and health professionals. During the Ebola outbreak in 2014, Africa’s biggest city quashed its spread through tracing (18,500 face-to-face visits), contact tracking (989 in total) testing and isolation. The World Health Organisation commended the state government for “a piece of world-class epidemiological detective work.” Repeating the feat with covid-19 is possible but on an entirely different scale. Currently, 22 of the 30 cases reported – 2 discharged cases – are in Lagos. More tracing, tracking and testing will need to be done and faster than the current pace. A 10-minute test kit for coronavirus, developed by Mologic, a UK-based company, is weeks away from being produced. The test kits which will manufactured in Senegal as well will be sold at cost for $1 – the project is being funded with a grant from the UK government.

Medical supplies donated to African countries by Jack Ma, Chinese billionaire and founder of Alibaba, arrived in Ethiopia over the weekend. Their distribution to other parts of the continent will be coordinated from Addis Ababa. The logistics of getting the test kits to everyone and medical supplies to health workers will be daunting. In a race against time, the Lagos state government should shy from recalling Max, Gokada and Oride, the banned okada operators to help distribute the kits. It should work closely with the private sector, especially the telecommunications companies and the coding community in Yaba to develop a digital tracking system. Some kind of USSD code that Nigerians are familiar with to help monitor infected patients with varying degrees of symptoms so that attention and scarce medical resources can be devoted to those who need it most. The joint effort of everyone is required to successfully contain the spread of covid-19; we are all in this together.

HEAD, HUMAN RESOURCES Adeola Obisesan

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Tuesday 24 March 2020

BUSINESS DAY

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Nigeria: Update on the bill to amend the Arbitration and Conciliation Act – breaking the ice

JOSEPH ONELE

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019 was a very busy year for the arbitration community in Nigeria and in different parts of the world. We witnessed several momentous developments for international arbitration in SubSaharan Africa and particularly, in Nigeria. As with every year, 2019 came with its high and low moments. While 2019 is gone and now history, this article, the first of two parts, considers one of the major developments for the arbitration community in Nigeria, likely to be of interests to arbitration enthusiasts, that happened or continued in the past year. In the second part, I shall consider the update on the $9 Billion arbitral award against the Nigerian government. Update on the Bill to amend the Arbitration and Conciliation Act One of the major significant

events for arbitration in Nigeria for 2019 is the much-anticipated Arbitration and Conciliation Act (Repeal and Enactment) Bill, 2019 (HB. 91) (the ‘Bill’) currently pending before the House of Representatives (HoR). It would be recalled that the Nigerian Senate had passed the Arbitration and Conciliation Act CAP A18 LFN 2004 (Repeal and Re-enactment) Bill, 2018 (S.B.427) into law in 2018. The Bill pending before the HoR is sponsored by Hon. Mohammed Monguno of the All Progressives Congress and passed its First Reading on 11 July 2019. The Second Reading of the Bill was done on 18 December 2019 and the Bill has now been referred to the Committee of the Whole to be presided by the Speaker of the HoR. The “Committee of the Whole,” as used in this context, refers to the entire 360 members of the HoR sitting as a committee in a deliberative capacity (as opposed to a legislative capacity). It is expected that the Committee of the Whole will consider the Bill in great detail, while making relevant amendments to the Bill, including adding, changing or deleting words in the Bill, with a view to coming up with the final version of the Bill. Thereafter, the Bill is expected to go through the Third Reading stage before being reconsidered and passed. Upon its passage, the Bill has the potential to make Nigeria become a force to reckon with among

the comity of preferred global arbitration regimes. Quite useful to note that the Bill include provisions which give the impression that Nigeria is ready to join the bandwagon of pro-arbitration legislative regime, particularly, as it relates to thirdparty funding (TPF). Given some of its very innovative provisions, it is expected that the passage of the Bill, will bring about increased preference for Nigeria as a seat of arbitration by the international arbitration community and also make Nigeria become a pro-arbitration legislative regime like Hong-Kong and Singapore. With respect to the mention of TPF in the Bill and taking into account that the Bill tacitly recognises third party funding , I have previously argued that the Bill, upon its passage, would have effectively overridden the common law position on maintenance and champerty (even though a commentator is of the opinion that the common law principle of maintenance and champerty does not apply to TPF. In the commentator’s view, the law as it stands does not prohibit the incidence of TPF in Nigeria-seated arbitrations. The new development on TPF notwithstanding, I have recommended in some of my previous publications that the drafters and/ or the lawmakers should consider including substantive provisions expressly allowing TPF, following the examples of pro-arbitration leg-

I have recommended in some of my previous publications that the drafters and/or the lawmakers should consider including substantive provisions expressly allowing TPF, following the examples of pro-arbitration legislative regimes such as Singapore and Hong Kong

islative regimes such as Singapore and Hong Kong. It suffices to say that I am not alone in my position as another scholar has equally alluded to the fact Nigeria would benefit from establishing a comprehensive regulatory framework for TPF. Given the ongoing discussion among scholars and arbitration enthusiasts as to whether the Bill ‘clearly authorizes’ TPF and whether it is sufficiently clear that TPF is allowed under the Bill or that the mention of TPF in the Bill demands further clarity, it needs not be said that the lawmakers will do well to clear the confusion and clear all doubt as to the issue of TPF under the Bill. Concluding remarks Yet again, it remains to be seen if the HoR will pass the Bill before the end of this year and include more (substantive) provisions to address some of the concerns highlighted by the arbitration community, different stakeholders as well as arbitration enthusiasts. It is my sincere hope that the HoR will speedily pass the Bill, with a view to restoring investors’ confidence in the ability of once revered “giant of Africa” and how serious as well as committed Nigeria is as a nation, to provide a more favourable business climate for foreign investment. One can only hope the lawmakers will allow good reason prevail and do the needful timeously. thejosephonele@gmail.com

Okeho General Hospital: Another morbid secondary healthcare institution

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keho, as a community, has been renowned to be a part of the history of the colonial and post-colonial Nigeria. There are certain factors that showed that we are a very crucial part of the politics of Oyo State. The area was firstly known as Okeho/Iganna district council, which was created in 1955 with thirty-six wards in the defunct western region of Nigeria. In 1976, Kajola local government was created, with headquarters at Okeho as a result of the local government reforms. The local government is one of the thirty three (33) local governments in Oyo State, the major towns in Kajola LG are Ilero, Ilua,Ayetorooke, Isemi ile, Iwere-oke,Ilaji-oke and other hamlets. In 1987, the Oyo State Hospital Management Board was inaugurated. The Board has three zonal offices at Ibadan/Ibarapa, Oyo/Ogbomoso and Oyo North managing fifty-one health outlets within the state. The Board is expected to provide an allencompassing health care that is accessible, affordable and high quality with a view to restoring, transforming and repositioning our health sector. Other health facilities within Oyo North are located at Saki, Iseyin, Iwere, Iganna and Ado-Awaye. Few weeks after the Board was inaugurated, the General Hospital, Okeho was commissioned by the then Military Governor of Oyo State, Col. Adetunji Olurin on the 11th of June, 1987. As such, this showed that the hospital was one of the pioneer General Hospital in the state.

While going through the facilities it was seen that the administration of the late Governor, Alhaji Lam Adesina, also commissioned projects, such as the Female/ children’s Ward and the Mortuary Block in the year 2000. Unfortunately, within the space of thirty-three and twenty years of commissioning all these facilities respectively, the hospital has become a morbid secondary healthcare institution. The hospital, being one of the oldest General Hospital in the state, with the best structure, is grossly underutilized and wasting away, located on a large expanse of land at the entry of the town cum junction that leads to other neighbouring communities, the hospital has become a shadow of itself. In fact, the people of Okeho and environs can attest to the fact that this hospital does not provide affordable, accessible and high quality Medicare. People have either of these two choices- visiting private health service providers within their localities or move to the State capital, Ibadan- when they need Medicare. At the moment, the two major storey buildings within the hospital, the administrative and Female/Children’s Ward have their roofs blown off. When I attempted to climb the stairs, I was almost stung by wasps and on getting upstairs, bats flew out of one of the rooms. What sort of equipment would be in an uncovered building? Going further into the premises, one would see that the mortuary is no more

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functional. The whole building is equally abandoned. It’s quite disheartening to see that nothing can be preserved in its current state. Prior to this time, people usually believe that drugs given to patients in any Government health facility is always genuine. However, the Pharmacy of this hospital is not well-stocked, inversely, patients would be required to get their drugs from any private pharmacy in town. From what I can see the Laboratory in this hospital is working but one can be sure that it is just the basic tests that would be carried out here. All of these attests to the overall “commitment” of the Government to the welfare of her citizenry. Equally, the waste disposal method is also sordid, it’s all emptied in a shoddy pit and burnt periodically. It should not be too much to build an incinerator for proper disposal. Having said all this, there is no Ambulance in the entire hospital. The physically present vehicle is no more serviceable, while querying further, I was told the other ambulance is abandoned in Ibadan because it was not fixed after developing fault. This shows that the hospital cannot provide emergency care for any patient within this locality. Asides the dilapidated buildings, there are also a lot of uncompleted buildings. The truth be told, if this sort of facility was located in any urban area, it would have been overtaken by hoodlums. I would agree that indigenes and residents of Okeho might not be able to pay heavily

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Olutayo Irantiola

but if they get value for their money, they would definitely pay up their bills. It’s rather unfortunate that we are experiencing two forms of economic wastage with this abandoned facility- the hospital’s inability to generate employment and the abandoned structure that has not been profitable to either the government or the community. There is a need for successive governments to complete all projects regardless of party affiliations or not. I would want to acknowledge the selfless service of the members of staff working in this very unconducive environment. It is only committed individuals that can give their best in this type of working environment. At this point in time, wherein professional are exiting the country for better working environment. We need to start with at least a very functional building well equipped. We deserve more in Okeho, our relevance should transcend every four years when the political class are jostling for office. We need hospitals that are adequately equipped in Okeho and Oke-Ogun in general. There is no need rushing people to tertiary healthcare facilities in Ogbomoso or Ibadan before they can have quality Medicare.

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Tuesday 24 March 2020

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

Market

Five countries capable of causing crude oil tsunami in coming weeks DIPO OLADEHINDE

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ome parts of the economy are grappling with pandemic-driven shortages. The oil industry has the opposite problem, the global market is expecting an extra oil of about three million barrels per day in April, with even more pending in May, in what many analysts have called a crude tsunami. With millions of people not taking trips, commuting or flying, the world’s appetite for oil has come crashing down, thanks to the coronavirus. At the same time, a price war between giant producers Saudi Arabia and Russia has caused the oil supply to swing up, however, five countries are planning to pump more oil, a development that could lead to lower oil prices. The oil market is expecting the Organisation of Petroleum Exporting Countries (OPEC) and allies members to add additional two million bpd next month while another one million bpd could come if a cease-fire is agreed upon in Libya and the country reaches pre-shut-in levels. Libya Libya’s daily oil production has dropped from more than 2.8 million barrels to less than 100,000 barrels, due to the closure of oil ports and fields by tribal leaders in eastern Libya in protest against the UN-backed government. Recall, tribal leaders in east-

ern Libya in January closed oil ports and fields, accusing the UN-backed government of using oil revenues to support armed groups against the easternbased army. Saudi Arabia Saudi Arabia is set to raise oil production next month, in an apparent attempt to put pressure on Russia after Moscow refused to join other nations in curbing output to support the price of oil. “Any large political power sometimes needs to remind its adversaries and competitors of its might. We believe Saudi Arabia seeks to teach the market a lesson,” says Bjørnar Tonhaugen, Rystad Energy’s Head of Oil Markets. Reports suggest that Saudi

Arabia can increase oil output next month, well above 10MBpd to 12.3 million bpd to punish Russia, this means as much as an extra 1.3 million bpd could flood the market next month just as demand is taking a major hit from the economic fallout of the global coronavirus epidemic. A new report by a Norway based, independent energy research and business intelligence company Rystad Energy believes Saudi Arabia will be the producer that plans to add the most, reaching total supply capabilities of 12.3 million bpd. “We believe their upstream crude production capacity, without any additional drilling is limited to around 11.5 million bpd in the short term,” Rystad Energy said.

Russia Russia has followed competitive suit by ramping up its own production, with Energy Minister Alexander Novak said last week the country had the capacity to ramp production by 500,000 bpd. “We expect that Russia can increase production by at least 300,000 bpd in the next 90 days, but for now we include a more conservative increase of about 200,000 bpd in our estimates,” Rystad Energy’s report said. UAE Another country expected to increase supply in the coming weeks is United Arab Emirates (UAE);the country is expected to increase production by about

200,000 bpd to 3.20 million bpd in April from February’s 3.04 million bpd, mostly from its flagship Murban onshore field. The market expects an increase of 110,000-bpd from Kuwait in April, raising its total production to 2.80 million bpd, with less upside risk than for UAE, Russia and Saudi Arabia. Iraq The last major country with ample available spare capacity to potentially bring to the market in April is Iraq. Iraq is expected to ramp-up production by 250,000 bpd to nearly 4.9 million bpd in April. If Iraq finds buyers for this additional crude, its total spare capacity of 480,000 bpd could be back online by June.

Nigeria considers alternative fuels to trigger energy freedom, discard subsidy STEPHEN ONYEKWELU

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ach time oil prices crash below Nigeria’s budget benchmark, the argument to discard the country’s costly petrol subsidy resurfaces but the Department of Petroleum Resources (DPR) has said it wants to offer Nigerians energy freedom, not subsidy removal. In an exclusive interview with BusinessDay, Sarki Auwalu, director of DPR outlined the oil and gas sector regulator’s vision, which seeks to drive a transition from premium motor spirit (petrol) to compressed natural gas. The economic reasoning behind this transition is straightforward. Landing cost for petrol in March is N117.8 per litre, down from a high of

N193.2 in January. At the January cost levels, the government paid N48.2 per litre to keep pump price at N145 per litre. www.businessday.ng

There are conflicting figures on how many litres of fuel Nigeria consumes a day but at an average of 50 million litres a

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day, the Federal Government paid N2.41 billion daily, that is, N74 billion to subsidise petrol in January. Although a landing of N117 per litre of petrol in March means there is currently no subsidy on petrol and this why the government can afford to reduce pump price from N145 to N125 per litre. Conversely, the landing cost for compressed natural gas (CNG) is less than N90 per cubic metre (the equivalent of a litre of petrol) and it is cleaner than petrol. This means it is already cheaper than petrol without subsidy. Using gas as an alternative, will not only ease out the pressure on the subsidies paid out by the Federal Government of Nigeria but will provide Nigerians with a much cleaner and cheaper @Businessdayng

alternative fuel solution. One litre equivalent of CNG gives at least 180 percent more of distance covered when compared to one litre of petrol and it is cheap, Auwalu pointed out. “We subsidise petrol because we want Nigerians to get affordable fuel. Now, compressed natural gas (CNG) is an alternative fuel, cheaper and cleaner. Some countries have gone far with alternative fuel. These countries include Italy, Mexico, China, Brazil and Iran. Our mission is to use the global system mobile (GSM) strategy,” Auwalu said. “The GSM democratised telecommunication and gave people choices. This is what we want to achieve with CNG, Contiues on page 16


Tuesday 24 March 2020

BUSINESS DAY

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Tuesday 24 March 2020

BUSINESS DAY

ENERGY INTELLIGENCE Interview

Access to capital is helping Impala Energy provide power for industries - Osaloni Dara Osaloni, a senior country manager at Impala Energy, a firm that provides power solution for industries in Nigeria and who have previously worked at Cummins and GE Electric, speaks to ISAAC ANYAOGU on why company is focusing on helping businesses to compete by cutting down their energy costs.

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ell us a little about your foray into providing IPP solutions in Nigeria’s power

sector? Power used to be like B2B selling    of generators  to companies  and industries in the past, NEPA was a little bit stable  then.  As  the power sector in Nigeria began to deteriorate,    then  we saw opportunities  to provide solutions for industries and private companies.  So we thought that bringing the idea of IPP solution into the market whereby we have investors who bring their money, put up the power plants and sell power to entities that require the power, including industries will be profitable.   What are some of your projects in Nigeria? With Impala, we have about 10 MW cut across different manufacturers in Nigeria for instance, we are working with APM Terminals in Apapa to cut down their diesel consumption. We are installing 2MW Gas fired Generators to add to what they had in the past. Diesel Generators was their major power source in the past.  Impala is fairly new in Nigeria. They have invested in a gas plant model and gas compression station in Delta state, the largest in Nigeria and West Africa. It means the company seeks to tie into the idea of the Federal Government of gas to power, that is conversion of natural gas to power. We are like one stop shop for any customer, we are giving you power not just the engine. We give you the engine and the gas and all you need is to see power and pay for it on monthly basis.   How are these projects funded? Our projects are funded by us since we have our own balance

sheet. Funding has been a major challenge in the power sector. For instance we are in the process of  building  another 30MW and we are funding the project apart from installation/EPC it is about 17.3million euros. This is to show we have the financial capacity to fund our projects ourselves  Although, we are still negotiating so you have an idea of the cost  implications  of Power generation.  If I put up a powerplant and

power the whole of Ikeja and the Disco  is paying me  based on power consumed and some people are stealing the  Energy, how will the  Disco  generate enough revenue to pay? We don’t look at doing  this type of  business at this time. We are focused on dealing with commercial and industrial customers because it can be tied to their operating cost.   How does Impala differ

from other companies providing power for industries? The major advantage we have is we have a pool of funds which we can pull money from to do this project whereas some people still need to go to the bank and the bureaucracies involved may delay the project. Also we have our own Gas to power all our powerplants of any size, but other IPP companies engage third parties for their Gas re-

quirements or they make it the end user responsibility to buy the Gas while they supply only the generators. We have access to funds that support up to 100MW project, so you can see that we have access to huge capital base.   Where do you get your funding? Impala is a baby of AP Moller Capital, a company that is pulling resources to help Africa.  AP Moller developed a fund, some for logistics and other core businesses and now power.   Utility companies in Nigeria have challenges with collections, do you experience that? We don’t deal with utility consumers, as such we don’t envisage such challenges. For now we are dealing with the commercial sector, and it is exciting, they are profit making organsations and every month they have projects and targets and when they sell their goods they pay. But for public utilities, it is not so this is why we are not going in that direction.   Where do you see the role of Impala in solving Nigeria’s power sector? If we solve power for industrial and commercial sector, they will reduce their costs and will lead to lower cost of production leading to cheaper goods and services to consumers. More Energy will be free for utility consumers since we are supplying power to the commercial consumers. Demand on the grid will be reduced and be more dedicated to utility consumers as what we offer is off-grid solution.  We are like a bridge between the GenCos, DisCos and focused customers – power sector in Nigeria is so cumbersome that you need to know where to play.

Nigeria considers alternative fuels to trigger energy freedom... Contiued from page 14

energy freedom.” To make gas available across the length and breadth of Nigeria, massive gas pipeline projects have been embarked upon and the Auwalu said two of the three big gas pipeline projects will be commissioned this year. The Escravos-Lagos Pipeline System (ELPS), which

connects the East and West. This has a capacity of 1.1 billion standard cubic feet (scf ) but has been doubled to 2.2 billion scf. The Obiafu-Obrikom-Oben (OB3) that has a capacity of 2 billion scf, will also be commissioned this year. The Ajaokuta-Kaduna-Kano gas pipeline with a capacity of 2 billion scf has reached advanced engineering design www.businessday.ng

phase and construction will start in the second quarter of 2020. The director of DPR said with gas availability across Nigeria, it will become easier to make alternative cheaper and cleaner fuel available to Nigerians. “This is why a committee was set up for liquefied petroleum gas (LPG) and CNG penetration which the DPR is

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hosting. The aim is to take gas to the people by converting commercial vehicles such as tricycles, taxis, buses and private cars to CNG,” Auwalu said. The DPR plans to persuade the government to convert the vehicles free of charge. If a car owner knows their vehicle is going to be converted free of charge, they will their cars and pay nothing. Then the @Businessdayng

government can put a token on CNG. If a litre equivalent of CNG is N80, the government can make it N90, N10 will go for the cost of conversion. Just like GSM. The first users paid N150, 000 per subscriber identity module (SIM) card, because they needed it. For them it was not expensive, they were paying for the masses that will get it free one day.


Tuesday 24 March 2020

BUSINESS DAY

17

offgrid Coronavirus takes toll on growing renewable sector DIPO OLADEHINDE

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he solar energy is the latest sector to take a hit from the deadly coronavirus pandemic which is undoubtedly taking a toll on various industries. The UK’s Renewable Energy Hub has cautioned that the continued spread of the virus will slow down the global deployment of renewables. A new report from Bloomberg New Energy Finance, a research firm, has already downgraded its outlook for solar and wind installations in China this year. Analysts are forecasting a maximum of 43 gigawatts of solar installations this year from 45 gigawatts before. Their most pessimistic forecast is for 31 gigawatts compared with at least 37 gigawatts estimated previously. Last year China was responsible for adding 30 gigawatts according to the industry association. Bloomberg ’s report predicts that as policymakers and businesses focus on short-term stimulus packages to help the economy, energy infrastructure investments and planning will temporarily go by the wayside.

According to the Bloomberg analysis, the effect of coronavirus will slow battery demand and result in lower-than-expected returns on investments in wind. China, the largest solar panel manufacturer on the planet accounting for 70percent of the global market mandated factories

and companies including solar companies to completely shut down weeks ago, previous excess production took care of shortfalls in the market, however, continuous shutdown of companies has caused a more damaging effect. Also, overseas solar manufacturing have also been affected by raw ma-

terial shortages, many solar manufacturing plants outside of China rely on Chinese imports for raw materials like aluminium framing and PV glass. “Yes, there is already a lot of panic in the industry, but nobody has seen any direct effects just yet,” James Warburton of Solar Wholesalers, a top solar

installer in South Australia told Solarreview.com Solar panel prices, production, and supply are likely to continue to be in a state of turmoil in the thick of the coronavirus outbreak. Solar is not the only renewable energy sector to be affected by the coronavirus. Last month, Wood Mackenzie said the

outbreak could have a significant impact on the wind energy industry in China. China is a wind energy powerhouse, but the virus has impacted wind turbine component production, according to the research and consultancy firm. The events in the global solar industry is not immune to Nigeria’s growing solar sector. The effect of coronavirus on solar industry reechoes event of 2018, when the Nigerian government introduced duty tariff on solar panels. While the new duty regime has had some negative effects on them, founders and their businesses have quickly adjusted to it and remained sturdy despite it. By 2020, Nigeria wants to have plans laid for more solar mini-grids that would eventually reach more than 100,000 people. Solar mini-grids are not a new concept worldwide, but they are an increasingly popular way to provide low-cost reliable electricity to rural areas. In Nigeria, they have the potential to give 26 million residents access to electricity, according to GIZ, the German aid agency that supports the initiative.

AfDB, AGTF invest $200m in Nigerian rural electrification programme

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he African Development Bank (AfDB) and the Africa Growing Together Fund (AGTF) have released $200 million in co-financing for the National Electrification Project (NEP), defined by the Federal State of Nigeria. Launched on March 17, 2020, the NEP is designed to bring sustainable energy solutions to Nigeria’s underserved communities. The Nigerian federal government and the African Development Bank (AfDB) officially launched the National Electrification Project (NEP) on March 17, 2020 in Abuja, the capital of Nigeria. This state initiative aims at providing access to electricity to households, micro, small and medium enterprises in off-grid communities across the country through renewable energy sources.

Mini-grid and off-grid solutions will be installed in 250 communities in four states: Niger, Ogun, Sokoto and Cross River. Speaking at the launching ceremony of the project, the Vice President of the AfDB in charge of energy spoke of the impact of the NEP. “More

than 500,000 people will have access to about 76.5 MW of power, 68 MW of which will be generated by solar energy. Besides, 150 students will receive training on renewable energy solutions and 20,000 micro, small and medium-sized enterprises (MSMEs) will be supplied with appli-

ances and equipment” said the VP of the AfDB, Wale Shonibare. The National Electrification Programme (NEP) has benefited from a joint financing of US$ 200 million, allocated by the AfDB and the Africa Growing Together Fund (AGTF), a US$ 2 billion fund established

Analysts: Isaac Anyaogu (Team Lead), Stephen Onyekwelu, Dipo Oladehinde

in 2014 by the AfDB and the People’s Bank of China (PBOC), whose mission is to finance development projects in Africa. Co-financing from the AfDB and AGTF will serve, among other things, as a guarantee and will help strengthen private sector investment in off-grid projects to provide rural Nigerians with access to reliable, affordable and secure clean energy. The NEP contributes to the achievement of the universal energy access target by 2030 The NEP will be implemented by the Nigerian Rural Electrification Agency (REA), a state-owned company responsible for the electrification of rural and underserved communities. The Nigerian Energy Minister, Goddy Jedy Agba, who co-chaired the NEP

launch ceremony, thanked the AfDB for investing in the project, which is indeed a remarkable contribution to efforts to achieve the goal of universal access to energy by 2030. The National Electrification Project is also in line with the Federal Government of Nigeria’s Rural Electrification Strategy and Implementation Plan (RESIP) and the Power Sector Revival Programme, which aims to increase private investment in the energy sector. As the largest economic power in Africa, Nigeria is one of the African countries with a critical deficit in access to electricity. According to the U.S. Agency for International Development (USAID), by 2019, the West African country had a relatively low national electrification rate, estimated at 45 percent.

Feedback: 07037817378, 08137433034, 08135447789

email: isaac.anyaogu@businessday.ng, stephen.onyekwelu@businessdayonline.com, oladehinde.oladipo@businessdayonline.com


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Tuesday 24 March 2020

BUSINESS DAY

The perils of the mixed coronavirus couple In the face of a frightening pandemic, my partner and I are responding quite differently Pilita Clark

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have lived with the same man for more than a quarter of a century. When we were younger and had more energy, we bickered so much that our friends called us George and Martha, the warring couple in Who’s Afraid of Virginia Woolf?. Age has dulled our edges and for years we have been in lockstep on all the most pressing issues: Brexit, climate change, Donald Trump, the latest iPhone. Then came the coronavirus. Like a lot of other people, we have discovered we are on different sides of a faultline we never knew existed. In the face of a frightening pandemic, we behave differently. As the outbreak gathered pace the week before last, we were visiting our families in Australia. One of us read obsessively about the virus, reaching for the phone in the middle of the night to monitor its advance and bounding from bed each morning to check the television news. That would be me. “Oh god,” I groaned one

day. “The Johns Hopkins site has gone down.” My other half, also a journalist, looked at me blankly. He had no idea the US university had a website charting the grim march of infection across the globe. Nor was he likely to any time soon. If we have lived through traumas, or trained to survive emergencies, then we are likely to be more calm and rational. He was keeping an eye on serious developments and texting worried friends locked down in Italy. But he was also sleeping soundly through the night, baffled by my rising anxiety about the muddled government responses to the outbreak in both Australia and our adopted home of Britain. When I told him I was going to try to buy face masks in Melbourne for the flight home, he stared at me as if I had said I would be boarding the plane in a space suit. When I read that the divorce rate in one province in China, the first country to go into lockdown, had spiked when quarantined couples were finally freed, I was not surprised to see one official blaming it on all the housebound weeks www.businessday.ng

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Some behavioural experts think our responses to crises are shaped mainly by experience. If we have lived through traumas, or trained to survive emergencies, then we are likely to be more calm and rational together. The row potential was clearly limitless. “You only washed your hands for five seconds!” “Your face mask is

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upside down!” “Are you actually trying to die?” So why are we reacting so differently? What does it say about each of us? Some behavioural experts think our responses to crises are shaped mainly by experience. If we have lived through traumas, or trained to survive emergencies, then we are likely to be more calm and rational. My partner has covered a lot more war and strife than I have. He has been taught to survive kidnapping in hostile environment training courses in the English countryside, which came in handy when he actually did get arrested in the second Iraq war. Does that explain the difference? Other mixed corona couples suggest not. At least one fellow worrier I know is a former war correspondent whose wife keeps telling him to get a grip. Another, also male, works in emergency care. The club of worriers is also tricky to define. At first I thought we were a like-minded tribe, already united in our dread of fiscal ruin or planetary destruction. Then I discovered that one @Businessdayng

of the first people in London to openly mouth my fears of official incompetence was Nigel Farage, the Brexit Party leader. I like to think there is an evolutionary benefit to the divide between the skittish and the calm: humans surely do better when half of us are fretting about dangers lurking ahead and the rest are asleep in the chair. Meanwhile, as London closes down, I have developed an unexpected fondness for Twitter clips of dogs hurling themselves into big piles of leaves and the thoughts of stand-up comics. That led me to this advice for any other couple confronting weeks of forced cohabitation from opposite sides of the corona divide. “I feel there are some people who are absolutely freaking out and some people who think it’s all overblown and we have nothing to worry about,” said the comedian and actor, Kumail Nanjiani. “To the former: stop reading constant updates. You know what to do to stay safe. Self care. To the latter: start reading constant updates.”


Tuesday 24 March 2020

BUSINESS DAY

19

Business schools grapple with a high turnover of deans There is a limited pool of candidates to fill what has become a complex leadership role

Jonathan Moules

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have never known anything even approaching this level of change before.” This verdict on the current “musical chairs” playing out among the deans who hold the top jobs at business schools comes from Anne Kiem, chief executive of the Chartered Association of Business Schools. The changes are dramatic. Ms Kiem, whose organisation represents UK MBA providers, says: “In the past 12 months we have seen a third of our 120 members appoint new deans and there is a limited pool of candidates. Lots of people don’t want to move jobs and lots of faculty academics might fit the bill but do not want to take on what is a tough leadership role.” This rapid turnover at the top of business schools, and the widening search for suitable candidates to fill leadership roles, is a global trend. In the past 12 months several longstanding deans have retired, such as Ted Snyder at Yale University’s School of Management, or have been promoted to help run parent universities, such as Kai Peters, who went from Ashridge Business School to become pro-vice-chancellor at Coventry University. The churn at the top comes at a time of exceptional change for business schools, as the role of deans widens in scope. They are now business leaders, responsible for the financial health of their schools, as well as heading academic institutions. MBA courses are undergoing something of an existential crisis, with more students wanting to pursue shorter programmes. Alongside that is a sector-wide — and potentially sector-altering — debate over the purpose of business education and its role in teaching future leaders to be more mindful of environmental, social and governance goals. Deans have to lead their schools through this mass of potentially conflicting demands and institutions are turning to a more varied pool of candidates to meet these challenges. Some are hiring leaders from multinational businesses, such as Sharon Hodgson at Western University’s Ivey Business School, a former IBM general manager with no prior academic experience; or choosing heads of other university departments, such as Fiona Devine, the sociology professor who now runs Alliance Manchester Business School. This year started with vacan-

Erika James, the new dean of Wharton, is currently leading Emory University’s Goizueta Business School © Emory University

cies at two of the sector’s most recognisable names, Harvard Business School and The Wharton School at the University of Pennsylvania. Wharton has just announced Erika James as its next dean, the first woman and the first person of colour to take the role. She is currently dean of Goizueta Business School at Emory University in Atlanta. In the frame at HBS, which has always hired from its current or former academic staff, are two female faculty: Amy Edmondson, professor of leadership and management, and Youngme Moon, professor of business. “Business schools are not corporations, but they are academic institutions with business aspects to them,” says Jackie Gallagher Zavitz, a partner at the executive search firm Heidrick & Struggles. “They therefore look for someone who can set strategy and bring people along with them, as well as having a strong academic understanding. The trouble is that Venn diagram overlap for a person with all those qualities is small.” Kenneth Kring, co-managing director of the global education practice at executive search firm Korn Ferry, likens the dean’s role to that of a regional general manager at a multinational. “The key performance indicators of a dean are the ability to raise new funds from donors, generate www.businessday.ng

returns from course fees and manage campus property developments,” he says. Only a handful of business schools are standalone institutions, so deans usually have to manage relationships within a wider university. This often means building respect among academics from other disciplines, who may view the research of management professors as inferior to their own, according to John Colley, a professor in strategy and leadership and associate dean at Warwick Business School. “There is a slight condescension towards those of us in the business school, while at the same time those in other departments are highly dependent on us to produce revenue,” Mr Colley says. Occasionally, professors

move from wider academia into business schools. Janice Allan was a lecturer in Victorian literature in the School of English, Sociology, Politics and Contemporary History at the University of Salford when the vice-chancellor asked her to take on a three-month secondment as deputy dean of the university’s business school. Within a week her term was lengthened to a year. This month she was appointed dean. “I believe I was hired because I had a proven record of KPIs [key performance indicators],” Ms Allan says. “I had overseen a fall in the dropout rate among students and increased the percentage of undergraduates progressing to masters degrees. “When I came into the business school I was concerned that the differences in my academic

‘‘

When I came into the business school I was concerned that the differences in my academic discipline compared with the faculty here would be an insurmountable barrier, but I quickly realised what I was here to do was provide leadership

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@Businessdayng

discipline compared with the faculty here would be an insurmountable barrier, but I quickly realised what I was here to do was provide leadership.” Ms Allan has continued her research into 19th-century popular fiction. Her latest book, on Sherlock Holmes, was published last year. Ann Harrison, a former management professor at Wharton and director of development policy at the World Bank, was appointed dean of the University of California, Berkeley’s Haas School of Business in 2019. “The biggest challenge of this role is the stamina it requires,” Prof Harrison says. “It is very long days and you need to be empathetic with a wide variety of people. You need patience. You need a vision, too, and you really have to be all in.” The gender balance at the top of business schools has been shifting: 25.8 per cent of business schools are now led by a woman, up from 20.5 per cent at the end of the 2013-14 academic year, according to global accreditation body the Association of Advance Collegiate Schools of Business. Haas was the first of the “magnificent seven” highest-rated US MBA providers to be led twice by female deans. “This is a special place as a centre for liberal thinking and free speech,” Prof Harrison says. “I could never imagine being a dean of another school.”


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Tuesday 24 March 2020

BUSINESS DAY

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

UNILAG Don Urges Buhari to focus on education, critical areas, Increase Infrastructures • Says we need education to track forward our development. • decried escalating fees being charged in private schools Mark Mayah

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university don, Lai Olurode (Prof ), has advised the president, Muhammadu Buhari, to focus on some critical areas like education, including greater investment in infrastructure, enhanced security architecture and poverty. Speaking exclusively on telephone with BusinessDAY in Lagos at the weekend, Olurode of the Department of Social Sciences, University of Lagos, Akoka, Yaba, Lagos, said this has become imperative because of the need to re-energise the economy and move the nation forward. He said, Nigeria has been groping in the dark over the years, due to acute deficit in all areas of the economy, especially education, health, road and human capital development. He regretted that these drawbacks had impacted negatively on Nigeria, such

L-R: President Muhammed Buhari; Akintade Abdullahi, Best Nigerian Young Scientist; Adegboyega Oyetola, Governor State of Osun at the presentation of a full scholarship up to PhD level to Abdullahi for emerging the overall best Young Nigerian Scientist of the Year.

that poverty, disease, squalor and deprivations have become endemic in the country. The varsity don, who drew the attention of the federal gov-

ernment to the uncontrolled escalating fees currently being charged by owners of private primary, secondary and tertiary institutions in the country,

shouldn’t in the first instance be entertained by the various regulatory agencies. According to him, ‘’we need education to track forward our

development. There should be uniformed, standard and affordable fees convenience to the lower and upper echelon in the country,’’ Olurode said. According to the former commissioner in the Independent National Electoral Commission (INEC)during the administration of former President Goodluck Ebele Jonathan, Buhari’s “strategy and focus should be on education, investment in infrastructure, especially in the rural areas, establishing cottage industries to generate employment, income and reduce poverty,” in the next three and a half years. He said some tax discrimination policies should also be enunciated in favour of the poor people, arguing that, “those at the bottom should be exempted from tax, while poverty should be tackled through investments in health and education.” Olurode, on security, which he argued was essential to enhancing development, should also be fully addressed by the president, saying, “Secu-

rity situation, particularly in the North Eastern part of the country, should be tackled, war veterans should be engaged to enhance the fight.” “The primary responsibility of a responsible government is to protect lives and property of its citizens. Therefore, the government must rise to the responsibility and ensure that Nigerians go to sleep with their two eyes closed.” Olurode, urged private business owners to install closed circuit television (CCTV) cameras to support the infrastructure deficit in the country to curb insecurity. Said he: ‘’the security infrastructure in advanced climes like America and Europe were complimented by business owners whose CCTV equipment is used to aide investigations and cracking of crimes The university don also called for the “Devolution of powers to the states and local councils. Government agencies and parastatals should also be cut down to reduce costs of running them.”

Proprietors, parents adopt technology to sustain learning as schools shut down

Nigeria, others to benefit from new MBA scholarship programme

…find list of online learning management systems below

KELECHI EWUZIE

STEPHEN ONYEKWELU

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ffective from yesterday, March 23, schools across states in Nigeria with the exception of Akwa Ibom, have been shut down to curb the spread of Coronavirus, but proprietors and parents are not relenting in efforts to sustain learning, during this period. Some schools are adopting virtual classrooms and other educational technologies to deliver lessons and monitor the progress of students, while at home. Parents are equally using various smart applications on tablets and smartphones to keep their wards busy learning at home. “We are currently using Edmodo, Active Learn and Google Classroom to stay in touch with our students. We also investing in video tutorial abilities for our teachers, to enable them deliver lessons through videos,” Oyin Egbeyemi, director, The Foreshore School, Ikoyi, Lagos told BusinessDay on phone. “We are also keen about being

able to monitor, assess and evaluate learning outcomes by giving appropriate homework at the end each virtual learning session.” The Successor Generation Community WhatsApp School has sprung up to cater to Senior Secondary students. It provides access to curated lectures for SS students in response to the government closure of schools to contain the coronavirus pandemic. With 257 participants, BusinessDay analyst’s attempt to join the group showed that it was already full. In the United States of America, teachers and faculty members who have never taught virtual classes are forced to adopt this method. America has 1.5 million faculty members, and, 70 percent of them have never taught a virtual course before, according to education technology researcher Bay View Analytics. To promote social distancing during the pandemic, universities are sending students home en masse to learn on their laptops. In a matter of weeks, as spring breaks end, www.businessday.ng

the $600 billion-plus higher education industry must suddenly turn to an approach many have long resisted: online education, a Bloomberg report says. In Nigeria, (particularly Lagos) this is not the first time an epidemic outbreak is disrupting schooling activities but not many schools have developed virtual classroom capabilities. Some schools do not have computers, at all on their premises. The 2014/2015 academic session allowed schools to plan and act, but they failed to take it. Due to Ebola, school resumption was extended to mid-October and early November respectively, said Elvis Boniface, founder and chief executive officer of Edugist, an education advocacy organisation. Pupils and students got back to school with all the panic. A few months later, schools were closed again because of the 2015 election. At the last minute, the presidential election slated for February 14 was moved forward by six weeks.

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igeria, Africa’s largest economy by GDP alongside her African counterparts will benefit from Eni and Saïd Business School, University of Oxford, MBA scholarships to strengthen the future of business leadership in Africa. Aside from Nigeria, candidates for the Eni-Oxford Africa Scholarship must be resident in one of the African countries in which Eni operates: Algeria, Angola, Egypt, Gabon, Ghana, Ivory Coast, Kenya, Libya, Morocco, Mozambique, Republic of Congo, South Africa and Tunisia. The collaboration will unlock potential of talented students from world’s youngest continent as Oxford Saïd leads the way in MBA recruitment from Africa, with 13 percent of this year’s cohort coming from the continent, spanning 12 African countries. Out of the African MBA students at Oxford, 56 percent are women.

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According to a statement made available to BusinessDay, The Eni-Oxford Africa Scholarship will cover MBA course fees, a living expenses stipend and one return air fare. Two places will be available for the 2020-21 academic year, and the remaining eight places will be opened in subsequent years. Peter Tufano, Dean of the Said Business School, commented: “In a generation’s time, there is no doubt that Africa will play a central role in the global economy. A swelling middle class will create new markets for consumer goods. Young people will seek skilled jobs. “These goods and jobs will require businesses, and businesses need the leadership skills and networks that we provide. The Eni-Oxford Africa scholarship will strengthen and deepen our longstanding efforts to engage with Africa’s future business leaders. “We are delighted to collaborate with Eni on this exciting scholarship, and thank them for their generous support. The experience and knowledge our @Businessdayng

African students bring to the cohort is part of what makes the Oxford MBA so unique.” Eni has also announced support for three DPhils at Oxford Saïd, the first of which will start in September 2021. Preference for these will be given to candidates with an African nationality. There are around 200m young people, aged between 15 and 24, in Africa. This makes it the world’s youngest continent, representing both a challenge and opportunity for policymakers. The School’s aim is to help businesses grasp the opportunities of Africa’s favourable demographics by supporting the education of talented African students. These students are able to make valuable pan-African and international connections while at Oxford. Oxford Saïd has embedded Africa-focused activities into its MBA curriculum and co-curriculum, including case studies and Africa business electives, as well as hosting senior African government ministers and businesspeople.


Tuesday 24 March 2020

BUSINESS DAY

21

EDUCATION What Nigerians should do to grow science education - experts KELECHI EWUZIE

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he Nations’ economy is not growing and investment is not happening at the level in Nigeria despite its huge potential. It means that either the environment is not right or the right actions are not being taken, or both. One sector of the economy where this slow growth of the economy is well reflected is the education sector. With the plethora of challenges such as inadequate funding from primary to tertiary level large number of unqualified and inexperienced teachers as well as infrastructure deficit to cater to needs of Science, Technology, Engineering and Mathematics (STEM) subjects; and also trade and entrepreneurship subjects. Gaps between the tertiary programmes and the requirements of the local and international work environment have also found many Nigerian graduates lacking in competi-

L-R: Noimot Oyedele, deputy governor of Ogun State and Layi Fatona, managing director, Niger Delta Exploration & Production Plc at the 25th Annual Lecture of the Stephen Oluwole Awokoya Foundation for Science Education (SOAFSE) in Lagos.

tive skills upon graduation. When. therefore. experts and education stakeholders gathered recently for the 25th annual lecture, award of honours and post graduate scholarships of Stephen Oluwole Awokoya foundation for science education in Lagos. The focus was on the state of science education

and what government needs to do to boost this pivotal aspect of human capital development. Among other things, the experts were of the views that no country can make any meaningful progress unless it encourages science education and invests substantially in it. “Free and Compulsory Pri-

mary Education Scheme established by Obafemi Awolowo should be revisited as this will tackle the frightening statistics of 13.2 million out-of-school children in Nigeria which is the highest in world population”, said Olabiyi Durojaiye, chairman of Stephen Oluwole Awokoya foundation for sci-

SUBEB, TSC screening not to witchhunt anybody- Kwara govt SIKIRAT SHEHU, Ilorin

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he Kwara State Government has said the on-going physical screening of local government workers, State Universal Basic Education Board (SUBEB) and Teaching Service Commission teachers, is not to witch-hunt any worker but to get true data of all staff. Speaking with Journalists at the weekend in Ilorin on the sideline of the screening exercise for Ilorin West Local Government, Fatimah Ahmed, Commissioner for Education and Human Capital Development says: “This screening exercise is purely

to gather accurate data of workers on the payroll of the state government and help planning. “It is a combination of staff of the teaching service commission, local government and SUBEB. I want to clarify that this exercise is not to witch-hunt anybody. It seeks to get the true total data of all our staff. “We have a template we are working on and it is boldly written on the form. We want to get the name, BVN, the PSN. After this, we are going to look at the outcome of this exercise and decide what to do next. “I want to advise the affected officers to make themselves available for this physical screening because we will

not accept anybody giving us excuses. We want to believe that if you are not present for these exercises then you are not a civil servant, especially that enough time has been given.” Ahmed, while describing the exercise as smooth and successful so far, stressed that reports from across the states have been impressive, urging teachers in the state to continue to be upright and dedicated to duties. Also, Saadu Salau, Special Adviser to the Governor on Political Matters disclosed that, no fewer than 7,000 SUBEB, TESCOM teachers and local government workers have so far been screened by his team.

Salau, who is the Team Lead for Ilorin West Local Government, explained that the mandate of each team was to ensure that the staffers of local government, teaching service commission and SUBEB present themselves physically before the team for screening. “Our own is to make sure that every genuine staff of SUBEB, local governments and Teaching Service Commission has the opportunity to be captured in this data generation. He, however, insisted that the exercise was to gather necessary data that would help the state government in carrying out its activities in a transparent manner.

Coronavirus: Akwa Ibom schools to complete 2nd term session • As Governor Emmanuel insists state is Free of Corona Disease MARK MAYAH

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s against all expectations, only Akwa Ibom state will open to classes in primary and secondary schools till the end of this week, as state chief executive, Udom Emmanuel has assured Akwa Ibom people that there is no need to live in panic and fear, as his administration has put in place modalities to ensure that the state maintains its clean slate against the global pandemic Corona Virus (Covic 19)

disease. To this end, the entire public and private institutions in the state are billed to complete the current second term education calendar by the close of work on Friday, 27th March, 2020. In a statewide broadcast at the weekend, the governor announced that with the measures he has put in place, there was no need to shut down public schools in the state as they are supposed to close within a week. While urging everyone to go about their normal duties, he appealed for utmost www.businessday.ng

caution and deep sense of rationality, especially from the media, in the manner of reportage of the global pandemic, adding that there is no redeeming value in causing panic in the State. “I want to assure the public that the rumours and false information going around on social media are completely false…there is no confirmed case of COVID-19 disease in Akwa Ibom State.” G overnor Emmanuel explained that even before the first confirmed case was recorded in Nigeria, he had immediately weeks ago set

up an Infectious Disease Prevention and Control Task Force with a charge on the Commissioner for Health to remain on top of the situation. In addition, “functional ambulances and rapid response teams are on standby to move any suspected cases to the Emergency Operation Centre at Ikot Ekpene.” He said “the Emergency Operation and Treatment Centre is ready to serve as an isolation/treatment centre to receive, and care for any confirmed case of COVID-19 infection if it occurs.”

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ence education. He stated that Federal and State Governments need to make the sacrifice for easy access to fiber cable connection across the country. This will shoot Nigeria up in the ranking in the global digital fourth or fifth industrial revolution of the world and will enable us to disseminate education to Nigerian children. Layi Fatona, managing director, Niger Delta Exploration and Production Plc, observes that the country’s inability to effectively key into the knowledge economy has been at the root of our developmental challenges over the years. Fatona who received an honourary award from the foundation said that Science Education, or Science, Technology, Engineering and Mathematics (STEM), as it is also popularly called, is an area of education his company is passionate about as an Organisation. “As a proudly Nigerian Company founded on the belief that Nigerians have all it

takes to successfully run businesses in intensely Science and technologically-driven sectors, we place a very high premium on attracting and retaining the best of indigenous technical know-how” Fatona said. On his part, Chamberlain Oyibo, chairman of the event observes that there is an explosion in the number of educational institutions primary, secondary and tertiary and the number of students seeking education. But the quality of the education offered is not up to par with that offered in the advanced countries. “With our unnecessarily large and ever-increasing population, adequate food, water and other necessities of life can only be provided by application of science and technology to everyday life. We have to start from the ‘ educational institutions to instill the awareness of science and technology at an early age. investment in science education is investment in our future”, Oyibo said.

Parents urged to allow students focus on courses they are passionate about KELECHI EWUZIE

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s Nigeria align with the 21st century approach to development, career experts have urged parents to allow their children to choose a profession based on their strength and interest. They observed that many parents try to make their children study courses related to these professions even when their children don’t have a passion for the courses. Such courses medicine, law, and engineering Commenting on the issue, Soluzo Ekenta, College-and-Careers Guidance Counsellor of Greenspring School, said, “There is nothing wrong with parents recommending that their children should study courses that can get them lucrative jobs. In the past, those courses include medicine, law, and engineering. But there are many other unpopular courses that also guarantee lucrative jobs, and in our new information technology (IT) age, there are hundreds of new lucrative IT-based jobs.” Soluzo suggested that instead of parents forcing their children to study courses that are believed to be lucrative, they should @Businessdayng

encourage them to study courses based on their strength and interest. She said, “At Greensprings School, our goal is to give our students a quality education that builds a solid foundation for whatever course they want to study in the university or college. We also guide them to choose courses based on their strength and passion.” “Towards the end of last year, we launched our “careers, college and university” readiness centres and introduced a new software called Maia Learning. The software enables our secondary school students to take personality tests and the results are used to recommend courses that suit the personality of each student. The students get to discover their areas of strengths and learn about profitable courses that are in line with their passion. And as it turned out, the students and their parents are happy, because the software helped both to achieve their objectives.” Soluzo encourages parents to listen to their children when it’s time to choose a course of study. Sh e b e l i e v e s c h i l d re n should be allowed to study courses that they are passionate about and related to their area of strength.


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Tuesday 24 March 2020

BUSINESS DAY

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Covid-19: MTN, 9mobile pledge to keep Nigerians connected, businesses operational with uninterrupted internet service Jumoke Akiyode-Lawanson

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s more cases of the Coronavirus (COVID-19) are confirmed around the country, telecommunication service providers have reassured Nigerians of constant internet service connection in order to enable them access to timely information on the virus and to stay connected with their loved ones. With the recent shutdown of all schools, restriction of social and religious activities by the Federal Government, and the increasing numbers of confirmed positive corona virus cases in Nigeria, social distancing and self isolation with the need for most people to work from home is inevitable. It has therefore become more important than ever, to have reliable broadband internet service; as more people will depend on online news sources to be informed on the situation of things in the country. Also, students and employees will need the internet to keep working by sending emails, carry out research and online financial transactions. Social media activities will also become more necessary during a time of social distancing. MTN Nigeria, in a statement sent to BusinessDay, said; “we understand the vital role our network and services play in supporting people, organisations and institutions nationwide.”

“Mindful of our responsibility – to keep Nigeria and Nigerians connected o the people they love and the information and technology they need, we have adjusted our internal policies and made a few changes to how we serve our customers,” the telco said. Stephane Beuvelet, acting managing director, 9mobile, in a message to empathize with 9mobile customers on the disruptions occasioned by

the corona virus crisis to lives and businesses, said that the company recognises the toll the crisis is having on people’s lives and affirmed it would live up to its promise as a caring network by keeping them connected with their loved ones round the clock. “I want to personally send my heartfelt wishes to those affected by the virus, both directly and indirectly, and wish them a speedy recovery.

I urge our customers and all Nigerians to take adequate precautions to protect themselves and their loved ones from this unfortunate incident that has enveloped the globe,” he said. Beuvelet said that 9mobile’s recognition of the importance of highquality telecoms services in the dissemination of information and staying connected, made it embark on the ongoing expansion of its 4G

L-R: Veronica Onoja; director, customer experience, Airtel Nigeria, Daniel Oladipupo; 5 million Naira Winner of Airtelthanks Cash Token Rewards, Oladipupo M.K; winner’s father and Onuzulu Pricilla, State coordinator, National Lottery Regulatory Commission (NLRC) during Airtelthanks Cash Token Rewards presentation, which held at Airtel headquarters in Lagos, recently.

LTE across the country. He said, “Our recent efforts in expanding our LTE capability across the country will enable us to provide robust broadband services to keep you connected with family and friends. The 9mobile network is purposely set up with adequate redundancies and buffers to ensure the seamless continuity of services.” The Ag. MD disclosed that 9mobile had put together preventive tips in line with the necessary protective measures against the virus. Also, our business continuity strategy has been activated to ensure customers continue to get support through service line 200 and all digital channels. MTN said that although its workers will be working remotely and some of its stores will be temporarily closed, it is working to keep the economy moving. “The situation unfolding around the world is unlike anything we’ve seen in our lifetimes and is a reminder that we’re all more connected than we’ve ever been. To get through this we need each other – we need patience, understanding, compassion, and to do the right thing for each other. With that in mind, we wanted to reach out and share what MTN is doing in response. We have been closely monitoring the situation and believe it is crucial that companies do two things - help contain the escalating outbreak and safeguard operations so that economies keep moving,” the telco said.

Fiam WiFi launches service as latest entrant in Nigeria’s telecom space

…To provide affordable data services for all Jumoke Akiyode Lawanson

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iam WiFi, one of Nigeria’s newest telecommunication companies, licensed by the Nigeria Communications Commission (NCC) in 2018 to provide and operate internet services has officially commenced services on Monday March 16, 2020 in Ajegunle, a suburb of Lagos Nigeria, after a three-month pilot phase. The company says its aim is to fo-

cus on high-density, low-income areas and rural communities to provide affordable and reliable connectivity for the mass market. Akin Marinho, founder and chief executive officer of the emerging internet service providing company in a statement made available to journalists said, Fiam WiFi installs Wifi hotspots and has started with 25 hotspots in Ajegunle with plans to install another 100 over the next six months. He further disclosed that after its launch in Ajegunle, Ajeromi-Ifelodun Local Gov-

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ernment Area of Lagos State, the team has put together a roadmap for its rollout plans in phases. According to Marinho, Amuwo Odofin, Alimosho, and Apapa will be covered during the first phase. Surulere, Oshodi, and Isolo are billed for the second phase. Shomolu, Mushin, Kosofe, Ikeja, and Agege are scheduled for the third phase and Ifako Ijaye, Lagos Island, Badagry, Ikorodu, and Ojo will be added in the fourth phase of its 18-month rollout plan. Emphasising that access to affordable connectivity

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should be for everyone. Marinho explained that the Fiam WiFi network will be strategically built to hold concurrent users of about 10 percent of the population of designated communities. The company has partnered with Dolphin Telecom and Vodacom, both of which provide broadband speed bandwidth. He also stated that as part of the company’s community-driven policy, customer engagement and maintenance teams will be sourced from residents of the communities it serves,

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thereby creating employment opportunities for many. In addition, the company has partnered with the local government to provide wifi hotspots in every primary school in Ajegunle. Revealing the company’s plans to compete in the tough and highly competitive market of internet providers, Marinho disclosed that Fiam WiFi’s pricing is its unique selling point adding that the pricing is targeted at making low-income earners have access to fast and reliable internet services at an affordable rate.


Tuesday 24 March 2020

BUSINESS DAY

BDTECH

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Zinox unveils digital solution for schools to ease shutdown Jumoke Akiyode-Lawanson

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inox Technologies Limited has unveiled a digital learning solution designed to aid schools and other educational institutions maintain the interaction between teachers and their pupils without physical contact or the need to assemble in a classroom. Through this digital tool, Zinox will bring together all stakeholders in the learning ecosystem on a virtual platform, thereby bridging the social distance enforced by the coronavirus threat. Indeed, the revolutionary solution will serve as a delight to teachers, pupils and educational institutions as it will enable them carry on their curriculum in spite of the ban on schools announced by the government. Part of the cutting-edge utilities offered by the solution is the opportunity it affords teachers and other instructors to connect with and hold virtual classes with their students. Courses and lesson notes can also be

uploaded on the platform for easy recall while assignments can also be handed out to the pupils/students and submitted by them, all on the platform. ‘‘As a forward-thinking and foremost technology company, Zinox is determined not to allow the coronavirus pandemic stall the learning of our young ones, who are indispensable elements in the future of Nigeria. Consequently, we have launched this virtual learning solution to bridge the gap,’’ said Onochie Eche-Chukwuma,

head of research & development, Zinox. ‘‘Through this platform, key participants in the learning cycle – teachers, pupils, administrators and even parents – have a virtual platform to connect seamlessly without having to suffer the inconveniences of the ban placed on schools which will come into effect on Monday. Teachers can hold virtual classes at pre-agreed times with their pupils between the hours of 9am – 2pm. Thereafter, pupils can rely on the platform for additional learn-

ing resources at their own leisure in the hours between 3pm – 8pm. What’s more, the platform allows for twoway communication and assignments can equally be handed out and submitted by teachers and pupils/students respectively. ‘‘It is a revolutionary tool which resonates with our status as a brand focused on future visions of a greater Nigeria. Already, we have seen huge interest from schools and other educational institutions who have started signing up for the solution,’’ he revealed.

WHO launches Health Alert service on WhatsApp Jumoke Akiyode-Lawanson

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s the Coronavirus pandemic spreads, the World Health Organisation has launched a Health Alert on WhatsApp. The new service, which is free to use, has been designed to answer questions from the public about Coronavirus, and to give prompt, reliable and official information 24 hours a day, worldwide. This will also serve government decision-makers by providing the latest numbers and situation reports. How the WHO Health Alert on WhatsApp works Start by clicking WHO Health Alert, then simply text the word ‘Hi’ in a WhatsApp message to get started. The service responds to a series of prompts and will be updated daily with the latest information. You can also visit the

WhatsApp Coronavirus Information Hub at whatsapp.com/coronavirus, and click on the WHO link on the homepage to open up a chat with the WHO Health Alert if you have WhatsApp installed. The WHO Health Alert will provide official information on topics such as how to protect yourself from infection, travel advice, and debunking Coronavirus myths. The service is initially launching in English but will be available in all six United Nations languages within the coming weeks (English, Arabic, Chinese, French, Russian and Spanish.) Since February, WhatsApp has reached out to dozens of governments to assist their efforts to provide accurate information to the general public. The WHO Health Alert is the latest official NGO or government helpline to become available on WhatsApp, joining the www.businessday.ng

Singapore Government, The Israel Ministry of Health, the South Africa Department of Health, and KOMINFO Indonesia. We are actively working to launch local services with other countries as well. Earlier this week WhatsApp, in partnership with the World Health Organization, UNICEF, and UNDP, launched the WhatsApp Coronavirus Information Hub, to provide simple, actionable guidance for health workers, educators, community leaders, nonprofits, local governments and local businesses that rely on WhatsApp to communicate. The site also offers general tips and resources for users around the world to reduce the spread of rumors and connect with accurate health information. WhatsApp also announced a $1million grant to the International Fact Checking Network to support fact-checking for the

Indeed, the Lagos State Government closed down all public and private schools on Monday March 23, 2020; as part of preventive measures against the spread of the coronavirus pandemic. The State Commissioner for Education, Folashade Adefisayo, said in a statement that; the move became necessary to prevent children and their teachers from getting more vulnerable to the pandemic. Further, the statement advised parents to ensure that their children practise ‘social

distancing’ while at home; wash their hands regularly or use hand sanitizers and observe high standards of personal hygiene. “The closure is not intended to create panic but to arrest the spread of the disease; which has become a global threat. Children should be encouraged to remain at home,” the commissioner said in the statement made available to newsmen in Lagos. Also, the Federal Government has directed the closure of tertiary institutions, secondary and primary schools nationwide. Nigeria’s first internationally recognised Original Equipment Manufacturer (OEM), Zinox Technologies Limited, has been at the forefront of leading the ICT revolution in Nigeria. For over 18 years, Zinox has been Nigeria’s IT identity, delivering a suite of cuttingedge but affordable technological solutions, which include high-end personal computers (PCs), laptops, power service, servers, workstations and a host of IT solutions.

Smile communications launches unlimited platinum data plan for customers #CoronaVirusFacts Alliance, to report on rumors that may be circulating on various messaging services including WhatsApp or SMS. Announcing the service, Facebook Founder and CEO, Mark Zuckerberg said in a post: “We’ve worked with the World Health Organization (WHO) on a way to get authoritative information about coronavirus sent directly to your WhatsApp. With WHO Health Alerts, you can receive their daily situation report, which has the latest numbers of cases by country around the world, as well as tips on how to protect yourself, and answers to frequently asked questions that you can easily send to friends and family. So many people wanted this service that even before we could announce it, people shared the link around WhatsApp and almost half a million people had already signed up.”

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s the intensity of the competition in the Nigerian data market surges, 4G LTE broadband service provider, Smile Nigeria continues to set the pace with innovative products, the latest being an unlimited internet plan called UnlimitedPlatinum. Masterfully crafted, Smile UnlimitedPlatinum ensures that customers enjoy fast and reliable internet for as long as they want. True to its name, customers who subscribe to Smile UnlimitedPlatinum, will for a period of one month have the luxury of unlimited internet of everything desirable; as far as their imagination can take them. To set it apart, Smile UnlimitedPlatinum offers data speed of up to 6Mbps, with NO data cap and NO FUP. Additionally, with no throttling of data speed, and a validity period of 30 days. Underscoring the appropriateness of UnlimitedPlatinum for all internet consumers especially heavy data users, Abdul Hafeez, chief marketing officer, Smile Nigeria, said that “this is the mother of all unlimited plans because customers, especially heavy data users, will now enjoy SuperFast, SuperReliable unlimited internet for 30 days.” @Businessdayng

To make it more desirable, UnlimitedPlatinum is priced at N24,000. Hafeez reaffirmed that Smile UnlimitedPlatinum “is truly unlimited internet and can go as far as your imagination can take you.” Renowned for its pacesetting streak Smile launched the first 4G LTE network in West Africa in Nigeria in 2014, revolutionising the way people access the internet. Smile was also the first to launch VoLTE on its network and has continued with its innovations including SmileVoice, a free mobile app that enables customers with any Android or Apple iPhone device (including those which are not VoLTEenabled) to make clear voice calls over Smile’s 4G LTE network to anywhere in the world. Smile was also the first to introduce an unlimited internet offering with no data limit. Market watchers say that Smile is continuously innovating to exceed existing benchmarks in the market; all in a bid to provide products that will serve Smile customers’ best interest in the present competitive environment. Smile UnlimitedPlatinum is a further attestation to Smile’s unending quest to always delight its customers and favour all consumers.


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Tuesday 24 March 2020

BUSINESS DAY

property&lifestyle Brains and Hammers raises hope for homeless Nigerians, builds 3,400-unit city CHUKA UROKO

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ith what is clearly an ambitious project by a private company operating in a difficult business environment like Nigeria, Brains and Harmers Limited is giving hope to many young Nigerians who desire to have their own homes. Known as Brains and Hammers City, the new development which sits on 107 hectares of land in the Life Camp Extension area of Abuja will, on completion, deliver 3,400 units of different house-types. It represents the company’s major revolutionary achievement since it was established 10 years ago. It is expected that, at an average of six persons per family, this development will provide homes for well over 22,000 Nigerians. The new development is fondly called ‘A City Out of No Where’ because, according to its developers, it is emerging from an area known to Abuja residents as a difficult terrain of dense forest and rocks, hence the transformation of that landscape is not only surprising but also inspiring. Before now, the major

landmark project in that neighbourhood was Stella Maris College, but with the completion of the Phase 1 of this city on 27 hectares of land, featuring 1,300 units, with 700 fully completed and delivered, the Brains and Hammers City has become the reference milestone. Brains and Hammers, in the last 10 years, has made a significant mark in residential property development. The company has an enviable portfolio consisting of over 5,000 completed residential homes across Nigeria and ongoing construction work on over 10,000 more.

Its current development portfolio consists of residential projects within Lagos and Abuja. Some of its sites are Life Camp, Galadima, Gwarimpa, Apo 1, Apo 11, Apo 111, Apo IV, Apo V, all in Abuja; Ijora and along the Lekki corridor in Lagos. So far, the 3400-unit Brains and Hammers City is its most ambitious project. The ‘City Out of No Where’, according to the company, will cater to mid and high level residents at affordable prices. The house-types include; Mulberry (1 bedroom), Coventry (2 bedroom), Tudor (3 bedroom), Windsor (4 bed-

room terrace), Ascot (4 Bedroom semi-detached with boys quarter), Fourzton (3 bedroom), Broughton (2 Bedroom), Kensignton (6 Bedroom terrace) and Dorchester (6 bedroom detached). The city boasts infrastructural amenities that give it a unique character. These are 4.3 kilometre access road, consisting of three roundabouts, security posts and street light, internal roads, sewage treatment plants, security watch towers, underground and overhead water tanks and fully equipped powerhouse station. “Residents are guaranteed

round-the-clock security and electricity, 24-hour help desk, 24-hour security and CCTV monitoring, dedicated transformers, 7.2 kilometres access road, fully independent water supply and water treatment facilities,” said Adebola Sheidu, the company’s chairman, at the weekend. Sheidu added that there were recreational area, filling station, school, parks and shopping centres. “We have opened up the district by constructing a dual carriage way measuring 7km with complete solar-powered street lights and roundabouts leading to the estate,” he said.

“This is a gated community where we have a dedicated unit for landscaping. The service charge is very minimal; children can go out of their houses, play with their neighbours, ride bicycles and engage in all kinds of fun games. There is a club house, swimming pool and tennis court,” the chairman assured. He explained that a 24hour service line is dedicated to reach facility managers with complaints on routine electrical, carpentry and plumbing services. House owners at the different Brains and Hammers estates enjoy the benefit of skilled resident artisans who respond quickly to fix technical problems. Recalling how the emergence of Brains and Hammers changed the real estate business in Abuja, Sheidu, said previously a detached house was sold for between N100 million and N120 million. “We brought the price down to between N60 million and N70 million. People who invest in our projects enjoy a massive return-on-investment of over 80 percent within 18 months. There is hardly any business you can do that will guarantee that kind of returnon-investment. This is why a lot of people try to key into our projects early,” he said.

‘We offer value to young home seekers which also present opportunity for investors’ In spite of the lull in the marketplace and the challenges in the economy, real estate still has something to offer, especially now that other asset classes hold out little or no hope for yield-hungry investors. In this interview, OFURE IBHAKHOMU, CEO, Lifecard Investment Company Limited, offers insights on the opportunities available to young home seekers and investors. Ibhakhomu, who is an alumnus of the Lagos Business School, Owners Management Programme (OMP24), shares with BUSINESSDAY her thoughts on the real estate sector as an investment destination. Excerpts

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eal estate means different things to different people. To you as an investor, a developer and marketer, what exactly does this sector mean to you? The recent progress recorded in the Nigerian real estate sector has been encouraging. The index is growing and the market value is also on the rise even though there have been tough challenges in the area of policy, and many stakeholders in the real estate has been voicing this out. Hopefully, we can have a drastic change in the policy-making aspect that will strongly support the growth we’ve been experiencing and also help stakeholders and investors achieve permanent solutions to challenges encountered in the sector. After a decade of experience in this sector, what drives your brand to be outstanding? My brand is LifeCard and as a real estate brand, it is driven by three key values which are insight, foresight and exceptionalism. We create a lasting impression on our investors, giving them

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smiling faces on their investments and making our young home seekers happy with the assets they acquire from us. How has this brand been able to cope amid challenges? What has kept us afloat and ahead of competition has been our unique selling proposition. We sell clear cut real estate solution to a distinct customer segment which comprises the vibrant young population who seeks happiness in the acquisition of homes, and the investors who seek a higher return on their investments. How have you been able to solve the funding chal-

lenges in this sector? Due to the kind of reputation we’ve built over the years, we are opportune to have a pool of investors who are driven by solving fundamental problems like providing homes for home seekers, with an option that allows them to make a greater profit on their investments. The saying that every living person is entitled to a certain portion of land is credited to you. What exactly do you mean by this? According to statistics, there are about 15.77 billion acres of habitable land in the world and the world population currently stands at about

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7.8 billion people. If you do the mathematics, you see that each living person is entitled to approximately 2 acres of land. So, our company is offering a rare opportunity that allows both market segments (young home seekers and investors) to key into and meet their needs. What strategies are in place to help young people key into this great opportunity your company is offering? Young people can plan their acquisition strategies based on their earnings. Our company has an existing structure that accommodates and meets their needs as regards this. We offer them the opportunity to open up their asset portfolios on a ‘pay as you go’ basis that won’t push their finances over the edge. We have a lot of land and everybody is entitled to a portion of land in Lagos. You can invest in as low as 100sqm, 300sqm and 400sqm and choose to resell your assets in one or two years when the prices appreciate. This means interested investors can buy in bulk below market value and later resell in bits and pieces. They have opportunity to key into the apartment units by

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investing in it for monthly rental premium payments; this also has helped to address the big gap in housing deficit currently being experienced in Nigeria. How do investors benefit from this opportunity? The value we offer to the young population of home seekers also presents an opportunity for investors to come in. How? They (the investors) can acquire assets below the market value and earn an accumulated and guaranteed return on investment on these assets up to 10 percent. This, as far as I know, is the best anyone can get in the real estate sector. What can you say about your company’s client base and some of the unique approach that has distinguished you? We have quite a growing list of reputable investors that believe in our capacity to deliver on profitable real estate portfolios. We’ve been able to meet and exceed their expectations and needs and this has immensely contributed to the increase of our client base. We discovered that while young people are interested in investing in real estate, @Businessdayng

the prices of genuine titled real estate investments are expensive, so we have decided to introduce something different called Land Banking. Land banking is buying land to sell in the future. We have a lot of land and everybody is entitled to a portion of land in Lagos. You can invest in as low as 100sqm, 300sqm and 400sqm and choose to resell your assets in one or two years when the prices appreciate. Our motivation is to create an inroad for intending young investors and home owners to have access to the vast opportunities that abound in this sector. What word of advice do you offer to investors, young home seekers and budding real estate entrepreneurs? My candid advice to investors is to key into a fertile value system with a real estate company that has a reputation for delivering a great return on investment on their assets. For the young home seekers, find the real estate firm that has your interest at heart. Your happiness is non-negotiable and to budding real estate entrepreneurs, stay focused, keep growing and keep serving values.


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BUSINESS DAY

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property&lifestyle Real estate investors adopt wait-and-see position amid coronavirus pandemic ENDURANCE OKAFOR

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ike other industries that have been disrupted globally by the coronavirus outbreak, Nigeria’s real estate sector is also being hit by the pandemic as industry players have now put on their armour of cautiousness. Gripped by fear of uncertainty due to the virus outbreak, Nigeria’s property investors are adopting the wait-and-see attitude and thus are pausing on their decision to make any real estate investments, a BusinessDay survey has revealed. “We had a client who wanted to buy a property, and we already finalized everything but due to the virus outbreak and currency uncertainty, he said he would want to wait for the next 90 days to watch the market,” Chidi Etoniru, Managing Partner of Joe Etoniru and Associates, a real estate development company said. Nigeria, Africa’s largest oil producer has seen its currency come under pressure this year after oil prices slumped below $30 a barrel, below the government’s $57 target, amid the global fight against the spread of coronavirus and a price war between Saudi Arabia and Russia. Earnings from sale of crude account for 90percent of foreign-exchange earnings and more than half of government income. Meanwhile, real estate developers depend largely on importation for more than 60 percent of their construction materials, and a weaker naira would mean higher cost of development. “Today we allowed the

rate (exchange) at the importer and exporters (I&E) window to adjust in response to market developments,” a senior central bank official said, confirming the bank changed the rate at the window for foreign investors to N380 per dollar from N366 per dollar. Nigeria’s real estate sector is however not the only property market that is feeling the heat of the virus outbreak. The virus has affected all segments of real estate in Europe and America. In London, according to reports, income loss runs into billions of pounds. The rental market in one of the most well-structured real estate markets in the world is the worst hit as transactions have ‘died’ completely. According to Etoniru, the confidence of real estate

investors have been dampened by the virus outbreak and as such only a few serial investors are still taking positions in the market. “First time home buyers and non-serial investors are now very careful about making investments in the market,” he said. Before the coronavirus outbreak, industry experts had projected the real estate sector to grow at 2.65 percent in 2020 with a high expectation that its subsectors were also going to stabilize. But with the property market now described as one that is in limbo by industry analysts, the growth performance may not meet industry projection. “If the virus outbreak is not contained in the next few months, construction

and project management may get a bit delayed due to the difficulty for real estate developers to import their materials,” Ayo Ibaru, COO / Director of Northcourt said, adding that the sector may still attract funds from investors despite the outbreak but “they will become more cautious.” Meanwhile, having recorded 22 confirmed cases, Nigeria is working to prevent an outbreak of the virus in a country where there are more people than any other country in Africa. The government has been prompted to take farreaching policy decisions including the banning of public and social gatherings. Also, the government has placed a travel ban on some countries known to have been badly affected by the virus. The Federal Government directed that both Lagos and Abuja airports should be short down from Monday. As Nigeria gradually observes partial lockdown with many of its citizens undergoing self-imposed quarantine, the warehousing arm of the country’s real estate sector is expected to benefit from the market disruption fueled by the virus outbreak. Industry experts expect the boost in demand for online shopping and quick delivery services due to more people avoiding market and large gatherings to fuel growth in warehousing. “E-commerce is expected to grow due to the virus outbreak,” Ibaru said, adding that the growth of the e-commerce industry in Nigeria will also lead to an increase in the demand for last-mile warehousing.

Lagos explosion: Estate surveyors pledge technical study to aid solution CHUKA UROKO

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s the ugly consequences of the gas explosion that rocked the Abule Ado area of Lagos continue to agitate the mind, estate surveyors and valuers say they are poised to carry out a technical study in the pipeline areas in the state. The real estate professionals, under the aegis of Nigerian Institution of Estate Surveyors and Valuers (NIESV), Lagos State Branch, said they would be using their Research & Development sub-committee to conduct the study and present a report to the government to aid a holistic solution to the problem.

Adedotun Bamigbola, the branch chairman, who made this pledge during the institution’s visit to the state’s Ministry of the Environment recently, noted that the Abule Ado tragedy would have been avoided if laid down regulations had been strictly adhered to. The chairman who was accompanied on the visit by Abdul-Hakeem Ayodeji Amodu, the Senior Special Assistant on Housing and other executive committee members, was received by Belinda Odeneye, Permanent Secretary, Environmental Services and Nurudeen Sodeinde, Permanent Secretary, Drainage Service and Water Resources, with other Directors in the Minwww.businessday.ng

istry. “We are ready to partner with your Ministry on the 240-day rainfall predicted on Lagos by the Nigeria Metrological Agency (NiMET),” Adedotun volunteered, explaining that they would be reaching out to property owners and occupiers through their over 6000 members across all cadres of the institution. Odeneye, in her response, appreciated the visit and commended the Branch for the proactive initiative. She expressed delight that a professional body like NIESV will be conducting the study, pointing out that government would always need support from the professionals.

Sodeinde, on her part, hinted that most of the problems encountered by the Ministry and government in flood management emanated from people’s attitude to laws guiding existence and the use of the environment. He, however, requested that a proposal and report for the collaboration on the awareness campaign on the environmental management solutions for the predicted heavy down pour would be expected from the Branch to face the challenges frontally. The Permanent Secretary promised that the Ministry was ready to partner with the institution to work on proffered solutions.

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

Cleaning: The challenge for facilities manager

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ne of the primary goals of an effective facilities ma nag e r i s to ensure the buildings and building systems provide a clean and positive environment for occupants and end users. This is one of the building maintenance goals Ensuring a built environment is clean and healthy can be one of a facilities manager’s most challenging tasks. Although many aspects of the work create cleaning challenges, one in particular is that floors, walls, or other surfaces may look clean, but upon further investigation, they may not be clean and healthy at all. Hi g h l y e x p e r i e n c e d cleaning professionals and facilities managers have learned this fact over the years in a variety of different ways. For instance, a surface thought to be clean would be swabbed and analyzed to uncover scores of germs and bacteria living on those “clean” surfaces. Another obstacle in their effort to provide a clean and healthy facility for building occupants is the fact that germs and bacteria may be present on unexpected surfaces. In a study conducted in Europe, researchers tested the restroom walls, floors, and counters surrounding or near electric hand dryers and paper towel dispensers. The samples were then analyzed in a laboratory and their findings were that: • Surfaces were most frequently covered with pathogens (a pathogen in the oldest and broadest sense is anything that can cause a disease) found in vast areas surrounding the dryers. • Around the warm air dryers, pathogens were found but in lesser amounts and more limited areas. • Where paper towel dispensers were installed, pathogens were still found but in even smaller numbers and areas closer to the dispenser. There are several points for facilities managers to know about this study. The first one is that the electric hand dryers are not the culprit, the real problem is the fact that many people @Businessdayng

still do not adequately wash their hands. Pathogens left on the hands after washing become airborne when the electric hand dryers are used. The second point is the importance of knowing not only where pathogens are located, but the scope of the region they may cover including surrounding surfaces. The next step is what facilities managers and cleaning professionals should do with this information. The first thing is they must realize that walls, counters, even floors are considered “touchable” surfaces. It is estimated that building users have many direct and indirect contacts with floors every day and because they can touch these potentially contaminated surfaces and then spread pathogens to other surfaces and other people, proper and effective cleaning is the only answer. To accomplish this, both facilities managers and cleaning professionals should do the following: • Clean all surfaces where pathogens are present with an all-purpose cleaning solution. The use of microfiber cleaning cloths is highly recommended and the cleaning cloth changed after each use. • Once the surfaces are clean, a disinfectant should be applied to clean the same areas. The first cleaning is to remove soil and then clean again to kill pathogens. A two-step process. Once again, the microfiber cleaning cloth should be used only once. • The disinfectant should be a “broad-range” disinfectant. This means it is designed to clean a variety of different pathogens. • Dilute the disinfectant per manufacturer’s instructions, always remembering that too much is wasteful and can leave a chemical residue on surfaces, resulting in rapid re-soiling. Finally, I suggest testing surfaces regularly to see how quickly surfaces build up with pathogens. The objective is to establish a kind of benchmark which will determine how often these surfaces and/or areas must be cleaned and disinfected.


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Tuesday 24 March 2020

BUSINESS DAY

Media business Event companies, venues get knocks in the time of COVID-19 Daniel Obi

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n the event of Covid “19 pandemic, many sectors and economies are feeling the heat with event companies and event venues, mass transport companies losing out as programmes are either rescheduled or cancelled. In Nigeria, many events scheduled last week across states were cancelled or postponed as a measure to contain the spread of coronavirus. This simply means loss of revenues by the event companies and owners of event venues who committed funds to host the events. International Breweries Plc had rescheduled its distributors’ conference scheduled last week at Federal Palace Hotels in compliance to the Presidency directive suspending all mass/public gathering or meetings of any nature for the next 30 days. “As a result of the raging COVID-19, and having reviewed the situation here in Nigeria, the Board of Centre for Financial Journalism (CFJ Nigeria) has decided to postpone The Bullion Lecture 2020 scheduled to hold on March

26, 2020”. Ray Echebiri, CEO, Centre for Financial Journalism said in a statement. The Federal Airports Authority of Nigeria also suspended its scheduled national aviation conference earlier scheduled to take place between April 1 and 4, at the International Conference Centre, Abuja. A statement by the spokesperson of FAAN, Henrietta Yakubu, said that the decision was made in order to adhere to safety precautions in the face of the coronavirus outbreak.

Conversations with industry experts on Positioning for Business Growth organised by Hospitali Tea scheduled at The Providence by Mantis Hotel, Ikeja on March 19, was also postponed. In an effort to contain the spread of the virus, the president furthers directed the suspension of all public visits to prisons for the next 30 days, suspended all inter-schools gathering either for sporting purposes or otherwise for the next 30 days. In a circular issued recently also suspended inter-agency,

inter-institutions and interreligious gatherings for the next 30 days. The World Health Organization recently declared COVID 19 a global pandemic and advised that as much as possible, individuals and organizations should avoid clustered gatherings to prevent the spread of the virus. The world faces an unprecedented challenge in terms of combatting and defeating COVID-19. Creative solutions for those who operate within the marketing space are necessary.

COVID-19: Tell your followers to sit at home, Foundation advises religious leaders, politicians Daniel Obi

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he Akin Fadeyi Foundation, convener of the Corruption, Not in My country Project has called on all religious, political and traditional Institutions to adhere to the government and World Health Organization’s directive on the restriction of all religious and political gatherings. In a statement signed by the Organization’s Founder and ED, Akin Fadeyi, ‘’The rate of infections and tragic mortalities around the globe has underscored such compelling need for all of us to yield to government directive’. He added, ‘irrespective of our country’s level of coordination, surveillance and critical preparedness, as citizens, we still have a huge role to play within our communities to ensure the prevention or reduction of human-to-human transmission. This will not only protect us; it will also reduce the pressure on our nation’s health workers who are staking everything on the front-line to keep us alive”.

Following the most recent report issued by the Nigerian Government, there’s a total of 22 confirmed cases in the country. To this end and as a preventive measure, the federal government has issued a travel ban on the US, UK and 11 other countries, whilst schools are also being shut down. Nonetheless, Nigeria’s

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Centre for Disease Control (‘NCDC’) has developed a new guideline for people to stay in self-isolation. In the guideline called the ‘Self Isolation Guidance for Nigeria’, citizens returning into the country especially from China, Japan, Italy, Republic of Korea, Iran, France, Germany, and Spain are advised to adhere strictly to the 14 days self-isolation rules

to prevent further exposure or spreading of the disease to other members of the society. However, if religious and political gatherings are still being observed unabated, Nigerian citizens and indeed foreigners amongst us would be vulnerable to the risk of infection, at a time where even the best scientist in the world are still grappling with straws to find a cure. We commend the NCDC for its timely release of information and efforts since the outbreak of COVID-19, even as we acknowledge their possible challenges in the face of infrastructural shortfalls in our healthcare system. 60th Coronation anniversary of Awujale of Ijebuland postponed Due to the realities and in line with recommendations of the Ogun State government regarding social gatherings and distancing because of the COVID 19 virus, the Diamond Anniversary Committee of the 60th Coronation anniversary of Alaiyeluwa Oba (Dr) Sikiru Adetona, the Awujale and Paramount ruler of Ijebuland has postponed the anniversary.

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Indomie stakes prizes in Magnet Promo

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ndomie noodles, has announced the kick-off of yet another exciting nationwide consumer promotion tagged “Indomitables Magnet Promo.” The three -month promo will run from February 25th to May 25th, 2020. Consumers are expected to participate and win any of the available prizes by buying a promo pack or carton of ‘Indomitables’ Indomie noodles, open a pack to get a free magnet and a chance to win other instant prizes. Consumers stand a chance to win a redeemable gift by sending a picture of the image on the magnet with their name and address to the number provided on the pack via Whatsapp. They will then get a confirmation message on how to redeem their prize. Commenting on the new promo, the Group Public Relations and Events Manager,

customers for their continuous patronage and support. “Indomie is the number one noodles brand in Nigeria and so we consider it an obligation to connect with our numerous consumers while building excitement in appreciation of their loyalty to the brand.” Ashiwaju, said participants in the promo will have the opportunity to win over one hundred million naira (N100, 000, 000) worth of prizes across Nigeria within the three month duration of the promo. He noted that the plan is to ensure that everyone who participates wins something as the promotion is expected to produce at least 100,000 winners. He listed the prizes to be won to include, iPads, bicycles, school bags, lunch bags, lots of Indomie noodles cartons as well as other consolation prizes. The Indomie ‘Indomitables’ comprises five super

Tope Ashiwaju said in a statement that the promo is an avenue to express the company’s appreciation to its loyal

heroes whose mission is to protect the world from manmade disasters perpetrated by villains.

FoodCo confirms Ade Sun-Basorun as CEO

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oodCo Nigeria Limited, an indigenous diversified consumer goods company has announced the confirmation of Ade Sun-Basorun as substantive Chief Executive Officer of the firm. Following the confirmation, Sun-Basorun, who had hitherto been operating in an acting capacity, will now lead the growth and expansion drive of the brand. According to a statement, he replaces Sola-Sun Basorun, erstwhile CEO and founder, who assumes the position of Chairman of the company. Ade Sun-Basorun is a seasoned executive with experience leading business transformation at FoodCo, McKinsey & Company and General Electric (GE) in Nigeria, South Africa, Kenya and the US. He joined FoodCo in 2017 as an Executive Director and successfully repositioned the business from a supermarketchain operation to a diversified @Businessdayng

Sun-Basorun

consumer goods company with interests in retail, quick service restaurants, manufacturing and entertainment. Growing from five outlets, FoodCo is now the largest supermarket chain in SouthWest Nigeria, outside Lagos, and employs more than 500 staff. The company was named the 2019 Multigenerational Business Leader of the Year at the inaugural edition of the Nigerian Business Leaders’ Awards organized by BusinessDay Media Ltd.


Tuesday 24 March 2020

BUSINESS DAY

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ADVERTISING Private sector, States must act fast, pool resources to stem coronavirus spread in Nigeria – Jinmi Ajayi Jinmi Ajayi is an Agribusiness Practitioner and founder of Vds Farms. In this interview, he assesses the agricbusiness and the possible impact of coronavirus on the industry. He advises that Nigeria must at all cost avoid a major spread considering our current realities. The world has been thrown into panic over coronavirus. Are you satisfied with government responses to contain it? here is uncertainty at the moment. It is necessary for people to act responsibly and not panic and follow the WHO guidelines on how to reduce and halt the spread of Covid-19 Virus. I believe the government is doing its best. On the state level, we see a lot of activities going on with tracking of returnees who have shared flights with those that tested positive. We need to further sensitise the populace and it is a good call by the Lagos State Government to ban gathering of more than 20 persons. In my opinion, a temporary broader restriction should follow soon to nip it in the bud considering our fragile facilities. We must at all cost avoid increased community spread. It’s quite disheartening to see even those who should know better focusing only on those traveling back into the country when we all should be practicing social distancing. These returnees seem to be more aware of the dangers of nCov spreading at an exponential rate. What are your fears if the cases of coronavirus increase in Nigeria? It’s uncertain how our MSMEs and SMEs will withstand this trying period. These cadres rely on daily or regular cashflow to manage to stay afloat. A number of businesses will fold up while some will adopt innovative strategies to stay afloat including online platforms. It will be interesting if we fail to learn from this when Covid-19 eventually clears. Praying is good but I also believe we possess what we need to be creative so we must get to work to combat a nationwide spread. We must at all levels develop bio-safety facilities to provide effective and rapid response that will at least stabilise patients before necessary transfer if needed. Mind you, the health and safety of healthcare workers cannot be taken for granted. This is for the immediate and it must not stop there. One can only imagine how well equipped we would have been if we had stretched our capacity post-ebola. We require broad based sensitisation and perhaps enforcement efforts. Our armed forces and paramilitary outfits are already stretched so should things get out of hand then volunteers will be needed to co-

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Jinmi Ajayi

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control. Government has given sufficient window and once the travel restrictions take effect I’ll suggest we observe a stay home for a few weeks. We now need strict measures. If I may add, it is important to commend the efforts of staff of the Nigeria Centre for Disease Control, Federal Ministry of Health, and the Ministries of Health at the State Level. These

There’s growing investment interests in medicinal crops and it seems the world is gradually returning to a stone age type of diet though in a more sophisticated manner

ordinate logistics and movement. If countries that invest in science and technology, varying types of medical practices and research etc. are shaken by Covid-19 it is only important that we act responsibly to stop the spread. The Nigeria Centre for Disease Control published guidelines on social distancing. This task is for all not only government. When this virus broke out on China, other countries had opportunity to take proactive measures to contain it, why do you think it has spread to many countries? It’s easy for people to speculate and argue. However, effective policy decisions are not taken in a hurry. You observe, thoroughly analyse events and possible outcomes before taking a decision. By extension, who says what to the press will depend on the proliferation of the virus. Furthermore, we could not have hurriedly shut our doors, not only because of economic and trade activities but we have and still have our citizens all over the world who embarked on essential trips either for personal reasons or in the interest of the nation. We cannot neglect them. I’ll rather be home in such a critical moment. That said, the responsibility is upon us to ensure we maintain good hygienic practices and embrace effective distance

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people are at the frontline. The activities of Lagos State Ministry of Health is always noteworthy. Other states need to quickly step up capacities to support Lagos State and the FCT from being potentially overwhelmed. Likewise, the private sector must act fast to pool resources together further aid a seamless collaborative effort. With rising cases of COVID 19, many sectors are receiving the hit, generally how will it affect Nigerian agriculture sector and farmers? Like the healthcare workers at the frontline who take necessary precautions, farmers as always are at the background providing dietary support. We require good nutrition to stay healthy and also during recovery from ailments. In the case of a lockdown, we will require logistics assistance and may need more hands across the value chains to enhance processing and delivery of food items including fruits and vegetables. I don’t expect a major blow to the agriculture sector, rather we will experience a form of readjustment. In fact, Covid-19 realities should encourage us to pay close attention to details around handling across the entire value chains, that is, farming, harvesting, processing, distributors and food workers. The downstream sector will face more scrutiny from consumers who will be more interested in assessing production facilities and work culture. Do you foresee workers standing the risk of being laid off as the pandemic intensifies across regions in Nigeria and affecting businesses? People’s health and safety should be of importance right now. I’m in support of a ‘stayhome’ to allow for adequate evaluation of the situation. We cannot afford to allow a major spread. Considering the cases in Italy, United Kingdom and Spain, the next two weeks is crucial. The actions we take now will determine whether it will intensify or not. Businesses with enough capacity should implement a work from home policy to limit contacts. We must at all cost avoid a major spread considering our current realities. If not, it will further drain the people’s morale. We are our greatest assets. The current administration is building infrastructure, a nexus for all sectors to thrive, however, Covid-19 is already affecting work progress. The sooner we overcame it, the better for all. @Businessdayng

Production is likely to decline in many agro-allied manufacturing companies as workers are advised to work remotely (from home). This means farmers will be affected. What is the implication of this to farmers and the economy? Health workers, patients and the populace need healthy diets. If production declines around processing, efforts must increase around cereals, fruits and vegetables then transporting harvests to the markets. I do not expect a major scarcity. We cannot hoard or hike prices unnecessarily for cheap gains. We cannot be driven by greed. Consumption may decline in the time of Covid-19, what does this portent for agriculture? It is expected that there will be strict restrictions against social gathering, parties and the likes, it is for our own good. We can only wait and see how events unfold. Consumption may decline but people will not starve. Agriculture practitioners will have to adjust and improvise to weather the storm. Whatever happens, I’m sure it will further enlighten practitioners and the authorities. There are learning opportunities in every situation. Apart from the call for fruits and vegetables, we have abundant medicinal crops used in treating various ailments. There’s growing investment interests in medicinal crops and it seems the world is gradually returning to a stone age type of diet though in a more sophisticated manner. Now, this is a form of awareness towards quality over quantity. To what extent can we take a good advantage of the situation to address agric business? It’s another call on consumers and practitioners to pay attention to details. Food business is serious business without room for the greedy and mediocre. Those downstream are more of the face of the sector hence must show and regularly train their staff on how to adopt best practices. They must understand the scruples of the food business. Consumers have the right to question sources of their groceries and meals served in restaurants. It helps bring to the fore the importance of the Global GAP, Good Agricultural Practices which emphasises food safety and traceability. Upstream practitioners also have a glorious task of setting up a regime that guarantees food security right from the farm.


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Tuesday 24 March 2020

BUSINESS DAY

FEATURE Four kids, one fate … How Sokoto children are abandoned by their parents and extorted by their guardians

Ibrahim Adeyemi

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he terrible smell from the dumpsite could block the nostrils; passers-by resist the stench, preventing their nasals from sniffing the odour which has overwhelmed the atmosphere. The early morning sun is sweltering, yet the winter’s wind blows heavily. Residents and commuters of the area become restless the moment they tread on the path of the Aliyu Jodi dumpsite which is earthily situated in the heart of Sokoto city; they are compelled to get their noses covered, dramatically. Amidst the terrible filth in the terrain, eight-year-old Abdulrahman Abdullahi – and his scavenging cohorts bend their backs against the flaming sun, squatting and scouting for used plastic products, rotten metals and all sorts of unidentified trashes. “I’m here to scout for used metals,” says Abdullahi as he stands steadily on his feet, winking his blood-coloured eyes and speaking, somewhat shyly. “I sell the used metals to get money to feed myself.” ‘In Nigeria, poverty wears a Northern cap’ As Nigeria overtakes India as the country with the largest number of people living in extreme poverty, people from the northern part of the country are reportedly the poorest. According to a report by World Bank, 87% of poor Nigerians are from the north – “in Nigeria, poverty wears a northern cap; if you are looking for a poor man, get somebody wearing a northern cap” – a top political leader from northern Nigerian once remarked. Controversial issues regarding the cause of such extreme poverty in the region have emerged recently. Many people, especially elites, believe that irresponsibility of parents towards their children, aggressive tolerance of child begging, child labour, child marriage – in the name of culture – and all sorts of abuses towards northern children have contributed immensely to the cancerous poverty strike in the northern parts of the country. Illiteracy, which results to denying children of school-ages their rights to basic education is also regarded has the basic yardstick for child abuses and gross violation of the Child Rights Acts. According to the United Nations International Children Emergency Fund, “Nigeria accounts for more than one in five out-of-school children anywhere in the world. Although primary education is officially free and compulsory, only 67 per cent of eligible children take up a place in primary school. If a child misses school for even a short time there is only a low chance, only about 25 per cent, that the child will ever return.” However, despite public clamour for the need to respect the rights of children, especially in northern Nigeria, heart-rending cases of child abuses continue to trend in north-

Guardian of the abandoned Almajiri kids

ern states of the country. Sokoto is not an exception. The children of garbage On the messy valley of wastes and trashes in the downtown of Sokoto state, five rag-clothed children are seeking public mercy; the kids are perpetual patrons of the dumpsite, looking for all sorts of wastes trashed by some individual. For the people, it is a waste, but for the children, it is a means of livelihood – which can be revalued after being devalued by the original users of the waste-products. “We come here every day to scout for used tins, plastic bottles and metals,” says Abdullahi, who seems to be the leader of the kid scavengers. But Abdullahi is not alone in this business; there are seven-year-old Usman Abubakar and Saliu Abdullahi, who appears to be too little to even know his age. Sad enough, the three lumpen kids who came from different families in the northwestern states have some things in common – they are poor children of careless parents, fated to meet in Sokoto in search for greener pastures. Odd as it may sound to hear, the kids who were put under the tutelage of some Islamic scholars in the state are forced to forage and find means of livelihood for themselves – and by themselves. As against the popular narratives about the children’s lumpenhood in the state, many of the kids expressed their displeasure over their condition as child beggars and foragers. Some of the children – while speaking to the reporter – revealed that they would not have any reason to go back home to meet their parents. ‘Our tutors get returns from our daily exploits’ Usman Abubakar wishes he could live to survive in a saner world. But as a kid, he has no control over his ill-fated lifestyle. He spends most of his times every day on the dumpsite looking for used plastic bottles to trade in the city of Sokoto state. A hungry man, it’s said, is an angry man; but for Abubakar, he is hungry but rather not angry – he is simply www.businessday.ng

Garbage child

self-contented with the token he makes from his daily exploits. Born in Zaria, Kaduna state – raised as a child beggar in Kano – and now he finds himself not just a child forager but also scavenger in the heart of Sokoto state. “I’ve spent four years in Sokoto,” he murmured, slowly. “I never attended any western school; I was brought to this land as a child beggar, under the tutelage and guardian of an Islamic teacher.” Sadly, Abubakar works hard like a donkey but earns like an ant; for hours, he will trek under the scorching Sokoto sun to explore the refuse site. “I’m here to search for plastic bottles,” he says. “Before, two pairs of plastic bottles are sold for N5 – but now, five pairs are sold for N10.” As hard as it is for Abubakar and his cohorts to make their daily ends meet, the scavenging children are compelled to give a kickback from the token made in the cause of their hustling. “Our tutors get returns from our daily exploits,” Abubakar opens up. “We pay at least N20 naira to our Islamic teachers daily, after returning from the streets.” Children put under the guardian and tutelage of Islamic tutors in Sokoto and many other states in the northern parts of the country are usually extorted and exploited,

I never attended any western school; I was brought to this land as a child beggar, under the tutelage and guardian of an Islamic teacher

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further findings have revealed. Saliu, one of the three scavenging children affirms that they are compelled by their tutors to give a return of their daily earnings, stressing that it’s dutiful to give a return to their teachers. February 20, 2020: Dundaye, Sokoto It’s a glowing Thursday morning in February, everything is huffing and puffing; six-year-old Shafiu Abu appears in his tattered attire, hanging his begging bowl round his neck and swinging the bowl frequently as he approaches doorsteps of inhabitants of Dundaye, a rural community in Sokoto state. Abu – as he’s fondly called – is a child beggar, who lives in pains and penury as a kid neglected by his parents – and subjected to torture by his guardian-tutor. The similitude of the calamity that befalls Abdullahi and other children of the garbage is exactly the primary woe that betides children of school ages in Sokoto state. As a child beggar, what Abu earns is not always totally his own; he also gives some parts of the offering given to him to his supposed guardian. But then, while Abu struggles to labour under the scorching sun of the state, his guardian who pushed him out to beg for food and money – and sit back at home to get returns – seems to see nothing wrong in engaging children in child labour. Mallam Isa Ruhullah an Islamic cleric in the state – and a guardian of many abandoned children – argues that there is nothing really bad for a kid like Abu to struggle for himself, noting that it is parts of what is required to fulfill his learning cause under his tutelage. “They get food for themselves. All I do is to teach them,” he says of the abandoned children under his tutelage. “Also, nobody or government brings any food here to feed them. All they do is they go to people’s houses (to beg), some hawk sachet water (pure water) or wash at people’s houses to get paid.” He added that “those who are not done with their learning only pay N20.” @Businessdayng

Curbing the scourge of child abuses More than ever before, Nigerians are clamouring for the eradication of the pandemic child abuse in the northern parts of the country – and the advocacy for the adoption of the Child Right Acts becomes more engaging. The recent movements against child abuse by non-governmental organisations such as Youth Hub Africa has raised the brows of elites over the need to urgently curb child begging, child marriage, child labour and all sorts of abuses meted on children in Nigeria. Recently, the Kano government, under the leadership of Governor Abdullahi Ganduje, banned street begging by vulnerable itinerant children of the state, following the controversial comment of the former emir of Kano, Sanusi Lamido Sanusi about educating northern children. Sanusi had advocated that careless parents of child beggars should be arrested; this brought about lots of social media actions and reactions by concerned Nigerians. However, while northern states such as Kano, Nasarawa, Niger and Kaduna have taken bold moves to respect the doctrines of the Sokoto still habours child scavengers and beggars who are neglected by their parents and usually extorted by their guardians. Meanwhile, erstwhile DirectorGeneral of Media and Publicity to the Sokoto government, Mallam Abu Shekara noted that the passage of the Child Rights Act is indeed critical to the resolution of the almajiri menace. And Sokoto is among the states that have made significant progress towards its ratification. “But again, religious and cultural variables are being addressed, through consultation with and involvement of traditional and religious authorities before the final adoption of the law,” he said. Reporting for this story is supported by Youth Hub Africa and Malala Fund.


Tuesday 24 March 2020

BUSINESS DAY

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Live @ The STOCK Exchanges Prices for Securities Traded as of Monday 23 March 2020 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 191,944.22 5.40 -7.69 378 31,009,236 UNITED BANK FOR AFRICA PLC 153,897.40 4.50 -10.00 420 29,162,562 ZENITH BANK PLC 335,942.48 10.70 -9.70 1,517 120,456,307 2,315 180,628,105 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 138,196.88 3.85 -3.75 455 46,675,185 455 46,675,185 2,770 227,303,290 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,096,514.84 103.00 - 162 2,424,029 162 2,424,029 162 2,424,029 BUILDING MATERIALS DANGOTE CEMENT PLC 2,210,153.81 129.70 - 103 580,029 LAFARGE AFRICA PLC. 146,580.94 9.10 -9.90 137 2,212,991 240 2,793,020 240 2,793,020 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 320,408.06 544.50 - 6 106 6 106 6 106 3,178 232,520,445 REAL ESTATE INVESTMENT TRUSTS (REITS) SFS REAL ESTATE INVESTMENT TRUST 1,386.00 69.30 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 8,538.46 3.20 - 1 10,000 1 10,000 1 10,000 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 2 200 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 2 200 2 200 3 10,200 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 52,512.75 55.05 - 14 24,891 PRESCO PLC 36,450.00 36.45 - 8 6,343 22 31,234 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,740.00 0.58 - 9 37,377 9 37,377 31 68,611 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 217.92 0.56 - 1 3,000 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 22,762.87 0.56 -6.67 93 24,570,849 U A C N PLC. 20,457.21 7.10 -9.55 47 2,644,626 141 27,218,475 141 27,218,475 BUILDING CONSTRUCTION ARBICO PLC. 423.23 2.85 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 31,284.00 23.70 - 94 956,966 165.00 6.60 - 0 0 ROADS NIG PLC. 94 956,966 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,390.52 0.92 - 4 110,010 4 110,010 98 1,066,976 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 5,558.94 0.71 - 0 0 GOLDEN GUINEA BREW. PLC. 220.45 0.81 - 0 0 GUINNESS NIG PLC 55,197.65 25.20 - 19 5,592 INTERNATIONAL BREWERIES PLC. 134,310.34 5.00 -9.09 20 513,518 NIGERIAN BREW. PLC. 215,916.36 27.00 -10.00 64 3,688,692 103 4,207,802 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 108,000.00 9.00 -10.00 60 1,840,681 FLOUR MILLS NIG. PLC. 85,287.90 20.80 7.77 74 2,259,402 HONEYWELL FLOUR MILL PLC 6,582.06 0.83 - 12 143,743 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 24,904.72 9.40 - 47 419,193 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 193 4,663,019 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 10,611.84 5.65 -9.60 62 1,072,665 NESTLE NIGERIA PLC. 673,757.81 850.00 - 90 39,873 152 1,112,538 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 5,316.09 4.25 2.66 37 1,145,856 37 1,145,856 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 16,080.43 4.05 - 32 695,304 UNILEVER NIGERIA PLC. 60,322.56 10.50 -9.87 42 1,099,601 74 1,794,905 559 12,924,120 BANKING ECOBANK TRANSNATIONAL INCORPORATED 81,655.50 4.45 -9.18 63 2,893,549 FIDELITY BANK PLC 50,416.15 1.74 2.96 129 16,868,512 GUARANTY TRUST BANK PLC. 492,972.25 16.75 -9.95 737 63,272,926 JAIZ BANK PLC 13,258.91 0.45 -8.89 20 1,027,694 STERLING BANK PLC. 28,790.42 1.00 -3.85 68 11,695,448 UNION BANK NIG.PLC. 189,284.89 6.50 -9.72 31 1,081,825 UNITY BANK PLC 4,909.52 0.42 - 9 130,771 WEMA BANK PLC. 17,358.51 0.45 -10.00 37 811,800 1,094 97,782,525 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 8,044.45 0.71 -8.97 24 3,123,244 AXAMANSARD INSURANCE PLC 18,375.00 1.75 - 3 14,500 CONSOLIDATED HALLMARK INSURANCE PLC 2,439.00 0.30 - 0 0 CORNERSTONE INSURANCE PLC 8,543.11 0.58 - 3 52,780 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,537.92 0.21 -4.76 10 1,501,000 LAW UNION AND ROCK INS. PLC. 3,952.62 0.92 -8.00 20 3,831,604 LINKAGE ASSURANCE PLC 3,440.00 0.43 - 1 2,000 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 2 45,850 NEM INSURANCE PLC 8,448.80 1.60 0.63 28 14,696,310 NIGER INSURANCE PLC 1,547.90 0.20 - 2 720,500 PRESTIGE ASSURANCE PLC 2,960.40 0.55 - 1 544 REGENCY ASSURANCE PLC 1,333.75 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 2 9,600 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 1 8,000 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 2 100,000 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 5,038.25 0.21 -4.76 35 4,694,419 134 28,800,351 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,400.97 1.05 - 7 125,800 7 125,800

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 6,784.62 1.05 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,671.82 1.36 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,700.00 3.85 - 25 245,965 CUSTODIAN INVESTMENT PLC 33,232.53 5.65 8.65 17 190,832 495.00 0.33 - 1 1,000 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 30,694.20 1.55 0.65 86 20,622,828 ROYAL EXCHANGE PLC. 1,131.98 0.22 - 0 0 250,543.47 23.85 -10.00 58 8,275,165 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 13,020.00 2.17 -9.96 35 2,992,134 222 32,327,924 1,457 159,036,600 HEALTHCARE PROVIDERS EKOCORP PLC. 2,991.61 6.00 - 1 6,843 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 781.69 0.22 - 4 65,532 5 72,375 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 4,610.86 2.21 - 8 21,430 4,484.54 3.75 - 24 357,509 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 3,364.21 1.95 8.94 37 793,121 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 835.63 0.44 10.00 8 255,177 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 77 1,427,237 82 1,499,612 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 8 273,328 8 273,328 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,000.21 0.34 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 216.00 2.00 - 0 0 NCR (NIGERIA) PLC. TRIPPLE GEE AND COMPANY PLC. 287.07 0.58 - 3 13,591 3 13,591 PROCESSING SYSTEMS CHAMS PLC 939.21 0.20 -9.09 27 7,880,751 10,962.00 2.61 - 0 0 E-TRANZACT INTERNATIONAL PLC 27 7,880,751 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 9 554 9 554 47 8,168,224 BUILDING MATERIALS BERGER PAINTS PLC 1,767.92 6.10 - 9 7,424 BUA CEMENT PLC 1,195,411.70 35.30 - 2 523 CAP PLC 14,700.00 21.00 7.69 27 339,520 244.37 0.46 - 0 0 MEYER PLC. PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 38 347,467 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 CUTIX PLC. 2,113.59 1.20 3.45 15 391,064 15 391,064 PACKAGING/CONTAINERS BETA GLASS PLC. 34,998.04 70.00 - 0 0 GREIF NIGERIA PLC 388.02 9.10 - 0 0 0 0 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 53 738,531 CHEMICALS B.O.C. GASES PLC. 1,685.79 4.05 - 2 3,600 2 3,600 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 0 0 0 0 2 3,600 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 9 651,631 9 651,631 INTEGRATED OIL AND GAS SERVICES OANDO PLC 24,987.14 2.01 -9.05 58 2,628,817 58 2,628,817 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 52,827.21 146.50 - 17 14,868 ARDOVA PLC 17,974.24 13.80 - 11 45,584 CONOIL PLC 10,131.70 14.60 - 28 72,974 ETERNA PLC. 3,116.91 2.39 - 2 11,740 MRS OIL NIGERIA PLC. 4,206.05 13.80 - 2 640 TOTAL NIGERIA PLC. 36,328.84 107.00 - 8 50,769 68 196,575 135 3,477,023 ADVERTISING AFROMEDIA PLC 1,509.28 0.34 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 1 6,480 1 6,480 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,779.06 3.00 10.00 44 13,351,457 TRANS-NATIONWIDE EXPRESS PLC. 421.96 0.90 - 0 0 44 13,351,457 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 1 5,000 1 5,000 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 1 225 IKEJA HOTEL PLC 2,058.01 0.99 - 3 8,891 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 30,401.62 4.00 - 1 500 5 9,616 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 3,960.00 0.33 - 2 6,000 2 6,000 PRINTING/PUBLISHING ACADEMY PRESS PLC. 205.63 0.34 -8.11 2 2,000,237 LEARN AFRICA PLC 771.45 1.00 - 1 5,000 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 427.10 0.99 - 3 50,625 6 2,055,862 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 547.04 0.33 - 0 0 0 0 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0

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Tuesday 24 March 2020

BUSINESS DAY

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Tuesday 24 March 2020

BUSINESS DAY

news Long drought awaits oil market as proposed OPEC-US pact collapses ISAAC ANYAOGU

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il markets have continued a bearish run as the anticipated truce, a meeting between OPEC and a ranking representative of the US oil industry, has failed to materialise. Last week, Ryan Sitton, a member of Texas Railroad Commission, the commission that represents Texas’ oil production, met with Mohammed Barkindo, OPEC secretary-general to discuss areas of possible cooperation. The duo had agreed that an international deal must be done to ensure economic stability as markets try to recover from the effect of Coronavirus pandemic. An elated Barkindo, invited Sitton to the cartel’s OPEC’s June meeting. Sitton, one of three elected commissioners, who run the agency, had proposed that drillers in Texas curb output by 10 percent and that a reciprocal response by OPEC will shore up prices. But Sitton’s proposal has now been rejected both by US regulators and drillers. Oil markets continued the gloomy outlook with price of global benchmark threatening to fall to $20. However, prices reversed losses on Monday, jumping as much as 4 percent after the Federal Reserve

pledged aggressive asset purchases to support markets. The move higher comes after US West Texas Intermediate crude posted its worst week since 1991. WTI rose 1 percent to trade at $22.86 per barrel. In a volatile session for the contract, prices were down 6 percent in early trading before rising as much as 4 percent following the announcement. International benchmark Brent crude traded 3 percent lower at $26.15 per barrel. What it means for Nigeria For countries like Nigeria, highly dependent on oil prices, the anticipated long-term bearish run for the oil market will continue to crimp revenue and roil the economy. Last week, Nigeria’s external reserves fell below $36 billion, touching its lowest levels in 29 months. The reserve which shows the country’s ability to weather external shocks dropped to $35.9 billion from a $36.02 billion level on Tuesday, 17th March, according to Central bank’s data. On Saturday the Central Bank said the naira will now change at N380 per dollar at the Investors and Exporters (I&E) forex window and raised official rate to N360/$1 to help Federal and State governments shore up revenue. Government has also reviewed

downwards the benchmark price of crude oil and cut 20 percent recurrent and capital expenditure of the budget to assuage fallen oil incomes. Lower oil earnings will hurt national response to COVID-19 as a rash of new cases reveal the country’s poor preparedness to deal with a pandemic that has claimed thousands of lives. Apart from depressed demand, the Saudi-Russia oil price war will increase a glut in the oil market and bloody the fight for higher market share among competing producers whose rebates may serve to worsen a dire situation. Oil companies are already feeling the heat as many have cut expenses and are postponing investment decisions. Share prices have plummeted and operations in some quarters are being stymied as these companies try to comply with best practices in social distancing to help stop the spread. Analysts say the Federal Government should be ramping efforts to reduce the cost of production of crude oil in Nigeria. “The government should be assisting to reduce the cost of producing a barrel of crude oil and also generally incentivizing producing in Nigeria,” says Ayodele Oni, energy lawyer and partner at Bloomfield law firm.

Obaseki commits to leveraging meteorological data to drive investment

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do State governor, Godwin Obaseki, is leveraging meteorological data to drive investments into the state’s economy and boost economic growth, as part of efforts at building a total society that caters for the collective needs of all citizens. The governor said this in commemoration of the World Meteorological Day, with the theme: “Climate Change and Water- Count every drop, every drop Counts”. Obaseki said the state government is applying weather, climate and water information to improve the safety and well-being of Edo people, reduce poverty and improve public health. He noted that climate, water and other related environmental services are useful inputs for socio-economic planning and development, which informed the decision to leverage available meteorological data to enhance the state’s decision-making process.

Governor Obaseki said, “As Nigeria joins the rest of the world to mark the Meteorological Day, it is imperative to identify the role of weather, climate and water information on planning and decision-making process. “That is why in Edo State, we are committed to building capacity and leveraging meteorological data in attracting investment to grow our economy. “As part of our commitment to weather and climate, meteorology weather stations have been installed at the University of Benin (UNIBEN) and the Edo State Polytechnic, Usen, in partnership with the Nigeria Meteorology Agency (NiMET), to strengthen teaching and research in environmental sciences and climate change. The institutions have also concluded plans to commence programmes in meteorology and climate change.” The governor added, “We have the Centre of Geospatial Information Science (CGIS) at the

Edo State polytechnic to attend to uses of geospatial science. Specifically, we have been applying weather data to boost farming and economic development, while also utilising mapping and geo-informatics for informed siting of social amenities across the state. “These have aided our administration’s efforts at building a total society that caters for the collective needs of all Edo citizens, ensuring an even spread of rural and urban development across the state.” The World Meteorological Day is celebrated every year on March 23, by the United Nations and its sister organisations to commemorate the entry into force in 1950 of the convention that created the World Meteorological Organisation. The day also highlights the contribution that National Meteorological and Hydrological Services make to the safety and well-being of society.

Lagos stops non-essential services at abattoirs to check spread of Covid-19 Joshua Bassey

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s part of measures to check the spread of Covid-19, the Lagos State government has ordered the immediate stoppage of nonessential services, especially food vending at the Oko-Oba Abattoir and Lairage complex located in Agege area of the state. The Oko-Oba Abattoir is the biggest in Lagos, and responsible for a larger percentage of the over 6,000 herd of cattle slaughtered daily in the state. The directive, according

to the government, is aimed at reducing crowd within and around the abattoir. Gbolahan Lawal, commissioner for agriculture, said on Monday that the measure was also being extended to other animal slaughter facilities within the state. Lawal said: “The era of several customers touching meat or meat products on display is over as the Lagos meat reforms is poised to ensure only wholesome meat is sold to the populace and also promote food safety.” He stated that the restriction on large gatherings of www.businessday.ng

people would be strictly enforced at the abattoir and other slaughter houses across the state. He said operators at such facilities were also expected to provide hand sanitizers and distance thermometer at the entrances of the Oko-Oba abattoir and other slaughter points. “Posters and handbills on COVID-19 shall be made available at all our abattoir and meat markets emphasising the symptoms of the disease, the preventive measures to be taken and the phone numbers to contact in cases of suspected outbreak. https://www.facebook.com/businessdayng

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Tuesday 24 March 2020

BUSINESS DAY

news

Covid-19: Lagos directs construction sites to limit workers to 20 or shut down

ABCON directs BDCs to comply with N380/$ official rate

... as BRT reduces passengers to 42

Johh Seyi Salau

Joshua Bassey

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s more cases of Covid-19 pandemic are reported across Nigeria, Lagos State government has directed all ongoing construction sites to limit workers to 20 or get shut down. Also, operator of the Bus Rapid Transit (BRT), Primero Transport Services Limited, said it was cutting down the number of passengers on board its buses to 42 sitting capacity. Fola Tinubu, managing director of the company, who announced this on Monday at news conference to give details of measures being taken to contain the deadly virus, also said all 434 buses in their fleet would be disinfected on daily basis until the crisis was over. To reduce contact with persons as well as cash, Primero, Tinubu said, is partnering Sterling Bank to offer free utility card to commuters to load in their fare with which they can tap in and tap off the buses without handling cash. Meanwhile, the Lagos State Ministry of Physical Planning and Urban Development, says it

would together with its agencies commence the enforcement of the limit at all construction sites across the state. “For the avoidance of doubt, all construction sites are expected to observe the following: No construction site must have more than 20 workers each day; All construction sites must make provision for washing of hand of all workers and visitors; All construction workers must observe social distancing of not less 2-metre (5feet); Construction site must maintain good hygiene at all times. “All construction sites are expected to have alcohol based sanitizers on site for the use of workers and visitors; All construction workers are also required to sanitize themselves before and after entering a construction site; maintain other safety measures; The general public is advised to report any construction site that does not comply with these guidelines to the Ministry or its Agencies. “Together we can stop further spread of the virus in Lagos State and Nigeria,” the ministry said in a statement signed by Idris Salako, the commissioner in charge of the ministry.

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ssociation of Bureaux De Change Operators of Nigeria (ABCON) has directed bureaux de changes (BDCs) across Nigeria to comply with the new official exchange rate of N380 per dollar as well as other provisions of the new foreign exchange regime. The Association also reiterated its assurance to members of the public of continued dollar sale at the new official exchange rate of N380 per dollar. The Association stated this following the new exchange rate regime announced weekend by the Central Bank of Nigeria (CBN) for the disbursement of the proceeds of the international money transfer services operators (IMTOs). Under the new exchange rate regime, the IMTOs will sell to banks at N376 per dollar while the banks will sell to the

… urges forex end-users to report violation CBN at N378 per dollar. The CBN in turn will sell dollars to BDCs at N378 per dollar while the BDCs are mandated to sell to the public at N380. Expressing support to ensure effective implementation of the new exchange rate regime, ABCON said it would continue to partner the apex bank for exchange rate stability and orderly conduct of the foreign exchange market, especially at the retail segment where its members operate. To this end, the Association appealed to members of the public to patronise licensed BDCs to get dollars at the N380 per dollar official price, so as to avoid falling victim of currency hoarders and speculators, who are creating impression of dollar scarcity in the economy. The ABCON also enjoined the public to report to its national secretariat any BDC selling

above N380 per dollar, saying such report should be forwarded to info@abconng.org. The Association stated that given the sharp drop in demand for dollars, caused by the impact of the coronavirus on global trade and travels as well as continued dollar injection by the CBN, there was no pressure in the foreign exchange market to warrant increase in the exchange rate above the official rate. It stated: “In recent times, governments across the world, in a bid to stop the spread of the deadly Covid-19 virus, have imposed travel restrictions which has led to sharp decline in the volume of global passenger travel. “Trade is also at its lowest level globally due to widespread shutting down of businesses in most countries especially China which accounts for about 25 percent of Nigeria’s import.

“One of the consequences of these developments is general decline in demand for trade and travel related services including foreign exchange. “In recent times ABCON has observed a steady decline in demand for dollars across the various categories of forex end users. Based on this observation and information from BDC members of ABCON, we can categorically state that demand for dollars is at one of its lowest point in the market. “Furthermore the CBN has sustained its weekly dollar sale to BDCs at the same level, hence keeping dollar supply constant and eliminating any apprehension of scarcity or rationing of forex. “In view of the above, we believe there is no need for anybody to buy dollars from anyone at exchange rate above the official rate.

Nigeria’s first COVID-19 death had underlying medical conditions …as confirmed cases in Lagos now 25 ANTHONIA OBOKOH

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igeria’s first coronavirus death has been reported as having underlying medical conditions. This is the first death out of 33 active cases and a total of 36 confirmed cases. Suleiman Achimugu, 67, a former managing director of Nigeria’s Pipelines and Products Marketing Company died of the virus on Monday after returning to Nigeria following medical examinations and treatment in the United Kingdom. Although the COVID-19 infection is the immediate cause of his death, experts say he had underlying medical conditions such as multiple myeloma, diabetes and was undergoing chemotherapy. A recent study from Italy’s national health authority says that more than 99 percent of Italy’s coronavirus fatalities were people who suffered from previous medical conditions. Currently, Nigeria has more than thousands of contacts not being traced. As of 10:35am on March 23, the Nigeria Centre for Disease Control (NCDC) announced the country had six new cases. The breakdown of the figure showed that two cases were confirmed in the Federal Capital Territory (FCT) and Lagos, respectively, one case was confirmed in Edo State while one death was recorded in Abuja. On Monday, Chikwe Ihekwazu, director-general, NCDC, said on national television that the country had mapped scenarios and what to do at different stages in management of the pandemic. “This week is the beginning; there is no magic bullet to this, there is no quick solution. We

have to work together at the federal level, with the presidential task force in place and the president has demonstrated that he is taking this very seriously. “I feel the best I can say is if you are a private sector practitioner, please be aware that you may be called on to provide support in certain areas and see how we can work together to scale up care,” he said. According to Ihekwazu, truly the challenge with our health system and any health system is not that we cannot provide care for this illness, we can. Speaking with a public health expert, Oladoyin Odubanjo, said curbing an epidemic is so much easier when people are effectively taught what they need to know. “A worrisome dimension has been the repeated story of people not getting through to the helplines publicised. As we succeed with the public enlightenment, we must ensure that when people do as told and phone in, they must get through to someone and, that also, easily,” he said. Meanwhile, the Lagos State ministry of health Monday confirmed three new COVID-19 cases, taking the tally to a total of 25 cases in the state, out of which 23 cases are active and two discharged. No fatality recorded in the state. According to the official twitter handle of the state @LSMOH as at 11:03 am the first case is a Ukrainian who arrived in Nigeria on the 15/03/2020 via a vessel. The second case is a UK-based who arrived on 20/03/2020 via BA75 and the third case a UK-based who arrived Lagos on 13/03/2020 via TK625. www.businessday.ng

L-R: Kelechi Nwaobi, group head, transaction and corporate solutions, corporate and investment, Starling Bank; Fola Tinubu, managing director, Primero Transport Service; Mark Redguard, brand and marketing consultant, Emzor Pharmaceutical Industries; Ganapathi Rao, technical manager, Infinity Group, and Segun Anako, general manager, Primero Transport Service, at the Primero Transport Service demonstration of buses disinfection, in Lagos, yesterday.

Coronavirus: Restaurants in Nigeria suspend dine-in, offer take-out services BUNMI BAILEY

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ome Quick Service Restaurants (QSR) in Nigeria have suspended dine-in table service and replaced this with take-out options as the country continues to record new cases of the novel coronavirus. These measures are designed to stop spread of the virus. BusinessDay survey of Chicken Republic, The Place and Mega Chicken in Lagos shows that the restaurants are offering take-outs instead of their usual dinning services. According to them, they are abiding by the Lagos State directive of not more than 20 people in any public gathering. “We can only allow customers to eat in the restaurants if they are less than 20 but if we have more than that number, we offer take away services instead. And this goes in all the other branches that we have,” Tinu Adejoke, a manager at Mega Chicken,

Lekki, says on phone. Usually, restaurants are known to have large gathering of people since it provides essential food services. Last weekend, the Lagos State government announced that the number of people allowed at any public gathering should not be more than 20, nullifying the previous limit of 50 people allowed to gather in public, including in churches and mosques. The government is pushing for social distancing more than ever to help contain the spread of the virus. “Since the COVID-19 outbreak, we have been advising our customers not to eat in the restaurants to prevent the spread of the virus. For now, offering take-outs is the best we can do,” an official at The Place Restaurant, states. Some countries are on total lockdown and restaurants have either been shut down or resorted to take-out or delivery service due to the coronavirus pandemic.

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‘It is important ports remain open for supply of essential goods’ AMAKA ANAGOR-EWUZIE

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here is need for Nigeria’s seaports to remain open at all times while the federal and state governments battle to contain the spread of coronavirus (COVID-19), Vicky Haastrup, chairman, Seaport Terminal Operators Association of Nigeria (STOAN), says. “As we face the global public health crisis, we advise government to ensure that the supply chain is not disrupted and the seaports keep running. Even if other sectors of the economy are shut down to guard against the spread of the virus, the seaports should remain open to ensure that there is no shortage of food, drugs and other essential supply to Nigerians,” Haastrup said in a statement issued from her office on Monday. According to Haastrup, the shipping sector is key in contributing to secure the @Businessdayng

continuity of economic activities, ensuring supply chains to industries; transport essential goods, including energy and food supplies, and transport of vital medical and protective equipment. She stated that allowing port business would help to increase the chance of the economic recovery on the other side of the outbreak. “The continued functionality of the ports and port ecosystems is imperative for securing movement of goods at scale, for prevention of shortages and thus for maintenance of public order,” she said. Citing examples, she stated that observations from China and the European Union show that the functionality of ports and transport systems must be a priority in the effort to manage COVID-19 outbreak and help minimise the impact of precautionary measures on the fluidity of trade and port operations.


Tuesday 24 March 2020

BUSINESS DAY

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news

African finance ministers agree on $100bn economic stimulus for Covid-19 impact …say measures must accompany policy of opening borders for trade

HOPE MOSES-ASHIKE

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frican Finance Ministers have agreed on an immediate emergency economic stimulus to the tune of $100 billion, while calling for coordinated COVID-19 response to mitigate adverse impact on economies and societies. The ministers met March 19, in a virtual conference to exchange ideas on the efforts of their respective governments in dealing with the socioeconomic impacts of COVID-19. They noted that even before the COVID-19 pandemic, Africa was already experiencing a huge financing gap in funding measures and programmes aimed at realising SDGs and Agenda 2063 targets and goals. In a statement from the Economic Commission for Africa (ECA), the ministers emphasised that without coordinated efforts, the COVID-19 pandemic would have major and adverse implications on African economies and the society at large. Original economic forecasts in most economies are on average, being downgraded by 2-3 percentage points for

2020 due to the pandemic. They said waiver of all interest payments, estimated at $44 billion for 2020, and the possible extension of the waiver to the medium term, would provide immediate fiscal space and liquidity to the governments, in their efforts to respond to the COVID-19 pandemic. The interest payments waiver should include not only interest payments on public debt, but also on sovereign bonds. For fragile states, the ministers agreed on the need to consider waiving principal and interest, and encourage the use of existing facilities in the World Bank, International Monetary Fund (IMF), African Development Bank (AfDB) and other regional institutions. As part of an immediate health response, the ministers agreed that there was a need for a coordinated response in the logistics and delivery of testing equipment. In this regard, the ministers emphasised the need to work with the WHO and existing continental institutions, in particular, the African Union and Africa CDC, while making maximum use of existing systems and funding partners, such as the Global Fund.

COVID-19: Anxiety grips Aso Villa as Bauchi governor goes into self-isolation TONY AILEMEN & JAMES KWEN, Abuja

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nxiety is brewing in Aso Villa, Nigeria’s seat of power, following the decision by Bala Mohammed, Bauchi State governor, to go into self-isolation on Monday, BusinessDay has learnt. Governor Mohammed went into self-isolation after Mohammad Atiku Abubakar, son of former Vice President Atiku Abubakar, who recently returned from an international trip through Lagos, tested positive to coronavirus. The governor had shaken hands with Atiku’s son in Lagos recently, according to a statement signed by Mukhtar Gidado, his senior special assistant on media. “It would be recalled that Governor Bala Mohammed, who also recently returned from an official trip in Lagos,

…after Atiku’s son tested positive met with Mohammed Atiku Abubakar in the Aero Contractors aircraft where they shook hands and exchanged pleasantries. So far, the governor has not exhibited any symptom of the disease, but based on the recommendation of the Nigeria Centre for Disease Control, he will remain in isolation in order to avoid the risk of spread of the disease,” Gidado said in the statement. He said the governor’s blood sample had been taken and was undergoing clinical test, and the governor and his entourage would remain in isolation pending the outcome of the clinical result. The anxiety is arising from the fact that Governor Mohammed was at the National Economic Council (NEC) meeting presided over by Vice President Yemi Osinbajo last week Thursday, where he

…Aisha Buhari calls for total shutdown

interacted with the vice president, governors and other State House staff. BusinessDay gathered that Vice President Osinbajo cancelled his assignment to commission “Traffic Radio” in Abuja on Monday. His appointments were also cancelled, although he was in the office. As at the time of filing this report, Nigeria has reported 36 confirmed cases of coronavirus with one death. To curtail the rapid spread of the pandemic, Aisha Buhari, wife of the president, has called for complete lockdown. She commended the policy of stopping children from going to school over the coronavirus pandemic, but said it was wrong to expose their parents to dangers by allowing them to report to work at the same time. “It is commendable that

state governors have closed down schools; however, this could be counterproductive if parents are still going to work. We should not isolate students and expose their parents. Let us remember that they will meet at home,” the first lady tweeted on Monday via her verified twitter handle, @aishambuhari. The tweet came with the hashtags, #TotalLockDown, #StayAtHome. She had last week announced that one of her daughters had self-isolated, having returned from the United Kingdom, even though, according to her, the daughter had not displayed any symptoms of the coronavirus. She also tweeted that, on her part, she had ordered the shutdown of her office at the Presidential Villa, Abuja, for two weeks.

ASUU declares indefinite strike, blames government Innocent Odoh, Abuja

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he Academic Staff Union of Universities (ASUU) has declared that its members have commenced a nationwide strike following the inability of the Federal Government to address the issues raised by the union. ASUU president, Biodun Ogunyemi, made this declaration during a briefing at its national secretariat in Abuja on Monday, and noted that the Federal Government had failed to address the issues raised by the union even after a two-week warning strike and the negotiations that followed. The union had disagreed with the government especially on the implementation of the Integrated Personnel Payroll Information System (IPPIS), which ASUU said was an imposition on the union and vowed to resist it. The ASUU president told BusinessDay on Monday that the union had to embark on the strike because the government had resorted to using hunger as a weapon against its members by denying them salaries over the IPPIS controversy. The IPPIS is simply incapable of accommodating academic staff salary structure at the tertiary level, he said, even as he blamed the government for allegedly igniting the crisis by trying to impose IPPIS on the university union. “The government has decided to use hunger as a weapon of war against its citizens, so we have taken our fate into our own hands. They have

seized our members’ salaries and by seizing our members’ salaries nobody should expect them to work. They have not paid our members for the work we did and until they correct themselves we will still be on strike,” he said. He specifically noted that the government had not paid ASUU members February salaries, adding that “there is no assurance that they will pay March. “We gave the government a credible alternative but they did not reply the letter and we thought they were going to abandon the idea of imposing IPPIS on the universities until they came back five years later and said ‘no IPPIS, no salary.’ “It was better when they were talking about force of logic but now they have changed to the logic of force. So, if they have changed to the logic of force which means that ‘no IPPIS no salary,’ that also translates to using hunger as a weapon of war against our members. They have started the war of attrition let us see where that will lead,” he said. On whether there would be an amicable solution to the crisis, Ogunyemi said, “You can’t have amicable resolution with somebody who has decided to starve you.” Last Tuesday (March 17) meeting by both sides was meant to reach agreement on the modalities for a workable arrangement of the two payment platforms - the IPPIS and the University Transparency and Accountability System (UTAS), proposed by ASUU as alternative to the IPPIS.

Hope Uzodinma (l), governor, Imo State, with Maurice Iwu, after the inauguration as chairman, COVID-19 Prevention and Control Committee in Imo State.

Oil companies restrict business contacts to stop spread of coronavirus in Nigeria Olusola Bello

… as Mozambique’s $30bn LNG suffers delay

s the coronavirus case begins to multiply, oil companies operating in Nigeria have decided to restrict business contacts across their offices and operational bases to stem the spread of the virus. The companies have limited visitations to their offices, business meetings among staff must be a distance of about two metres even when it is between two people in the office, while many of their workers are also directed to work from home. Other steps taken so far are that there is restrictions on travelling among their workers, and when they do they should engage in 14-day self-quarantine and no handshake, hand sanitizers must be compulsorily applied and the temperature of each worker must

also be taken before they enter their office premises. The Nigerian National Petroleum Corporation (NNPC), according to Kennie Obateru, group general manager, public affairs, said the management of the corporations had been trying to sensitise workers of the corporation on the importance of adhering to all the general rules that had been put in place to curb the spread of the virus. The group managing director of NNPC, Mele Kyari, had been engaging in weekly podcast to the workers to ensure they take precautionary measures against contacting the virus. Many external business scheduled meetings have been cancelled by the group managing director, while all those that

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came into the country are made to observe the mandatory 14-day self-quarantine. An official of Chevron Nigeria Limited that spoke with BusinessDaysaid,“Aspartofprecautionary measure to prevent the spread of COVID-19virus,wearerestricting business contacts with external parties to the barest minimum.” According to her, as the COVID-19 virus spreads across the world - seriously impacting people’s health, our way of life and global markets, it is stated that it is putting the safety and health of its workers and customers first, along with the safe operations of all our businesses. The country communication manager of Total Exploration and Production, Charles Ebereonwu, when asked to explain steps @Businessdayng

being taken by his company to curb coronavirus, he said Total had put in place processes and procedures that ensure that all personnel and visitors to our locations observe extensive personal hygiene measures as advised by local and international health authorities. “We have also complied with the Nigerian government’s directives on travels, especially from the countries affected by the Federal Government’s travel ban,” he said. As a company with a strict Health, Safety and Environment (HSE) culture, our staff and families understand the need for necessary life-style modification to protect themselves and others from COVID-19, both within and outside the workplace, he said.


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news Moody’s says naira devaluation to... Continued from page 1

banks hold good capital buffers, Moody’s said.

L-R: Taiwo Ladipo, incident manager, COVID-19 response, Oyo State; Bashir Bello, Oyo State commissioner for health; Seyi Makinde, governor, Oyo State, and Olubamiwo Adeosun, secretary to Oyo State government, during a visit of the governor to one of the Oyo State COVID-19 Isolation Centres at Jericho, Ibadan, yesterday.

Nigeria’s best move against coronavirus is... Continued from page 1

til further advice is given.

Measures so far implemented to curb the spread of the diseases, which has affected 36 people and killed one person as of noon Monday, are halting commercial activities for the country’s largely services-based and informal economy. Social-distancing, self-isolation and quarantining have been encouraged, especially in Lagos State, Nigeria’s commercial hub, which accounts for more than half of the cases in the country. The state government over the weekend asked its civil servants, from grade 1-12, to work from home and reduced passengers allowed on its BRT public buses to 50 people, after asking schools to shut down and limited social gatherings to 50 people. But as businesses shut down and more people stay at home, the state could lose up to N33 million in internally generated revenue (IGR) per day while the country could count losses of as much as N200 billion assuming a severe lockdown in the fashion of Italy’s is enacted. Without cushions in place, the impact of such a slowdown on Nigerians would hasten the World Bank’s gloomy prediction of worsening poverty levels in the absence of reform. Too poor to isolate The informal sector, which is at least 41 percent of the Nigerian economy, largely relies on face-to-face interaction for transactions to be complete. Akinloye is a participant in the informal sector; his wife, Adeola, is a caterer in Oshodi and she relies on Suleiman, a bus driver, to get to her shop. Her shop owner depends on her rent fees and probably would have another business dependent on them too. This is the chain that a shutdown would disrupt. Many of the businesses

in the country are Medium, Small, Micro Enterprises (MSMEs) which account for around 96 percent of firms in the country, 84 percent of employment and 49 percent of the GDP. A shutdown of the economy would deal the biggest blow to the country’s poor masses and would worsen hardship for the average Nigerian – yet it is the best option to curb the deadly disease. “Flattening the curve” to limit spread of the COVID-19 to a manageable number will be difficult to implement where around 90 million people live below the poverty line. Isolation would be a very expensive exercise for the ordinary Nigerian, without support from the government, which is largely unable to finance a major stimulus. Less than 4 in 10 Nigerians are able to spend discretionarily once they get past spending on the essential commodities, according to estimates by Lagos-based SBM Intel. In a report by SBM Intel, 63 percent of respondents said after spending on food, they had nothing left to spend. About 71 percent of households sampled earned between N30,000 and N120,000 every month. Only four years ago, Nigeria Deposit Insurance Corporation (NDIC) said only 2 percent of Nigerian bank account owners have at least N500,000 in their account. Since that time, per capita income growth has slowed with population growing faster than the economy. This means the opportunity cost of investing in health kits like face mask, hand sanitisers and soaps would be high for many Nigerians – especially in the North. With an average family size of eight, self-quarantining would be an uphill task. ‘Nigerians left on their own’ Unlike Nigeria which has

basically left its citizens on its own, other countries are putting in place effective economic response with a ‘Whatever it takes’ motto to preserve lives and reduce impact of the pandemic on the poor. The United States is planning a stimulus package that would involve direct cash transfers to citizens and help businesses stay afloat while the UK and much of Europe have announced plans to spend big to support businesses too. The Central Bank of Nigeria (CBN) announced a N1.1 trillion package to help businesses in healthcare and manufacturing respond to the COVID-19 outbreak but poor consumers are “on their own”, said Bongo Adi, economist and senior lecturer at Lagos Business School (LBS). Adi said that the lack of a database would make it difficult to identify the poor and even if that were possible, the lack of transparency in the system would see the money diverted for something else. “The smart thing will be to go the IMF or someone for an emergency bailout but we know that is not happening,” another economist, who pleaded anonymity, told BusinessDay. Real sector too fragile A lockdown following the outbreak of Covid-19 will also take a heavy toll on the real sector, particularly manufacturing, believed to be the economy’s growth engine. Bad as the current Covid-19 lockdown is on the economy, particularly the real sector, what are the stopgap measures? Muda Yusuf, directorgeneral of Lagos Chamber of Commerce and Industry (LCCI), said the government needs to look beyond tax credit in its quest for complementary funding sources for infrastructure. “We should be looking more in the direction of equity financing. But for this to happen, the policy and regulatory environment must be right,”

Yusuf said at a forum on the “Implications of Covid-19 Outbreak on the Nigerian Economy” organised by the LCCI in Lagos. The LCCI chief also recommended that Public-Private Partnership and Public-Private Dialogue should be deepened to harness quality ideas on how to manage this rather scary situation. He, however, added that it is also important not to respond to the situation in panic mode to avoid a disproportionate response which could do even more harm to the economy. Long drought awaits oil sector For countries like Nigeria, highly dependent on oil prices, the anticipated longterm bearish run for the oil market will continue to crimp revenue and roil the economy. Lower oil earnings will hurt any national response of lockdown to COVID-19 as a rash of new cases reveal the country’s poor preparedness to deal with a pandemic that has claimed thousands of lives. It is easy to see why the economy is vulnerable. More than 90 percent of Nigeria’s foreign exchange earnings are from crude oil and gas. Oil is also the major driver of accretion to the foreign reserves. But the price of oil has been tumbling, hitting an all-time low of $25 per barrel last week. Although the dramatic dip in oil price is not entirely caused by the Covid-19 pandemic, the demand for Nigeria’s oil and gas has reduced significantly. China is the world’s second-largest consumer of oil and its demand for oil alone has reduced by 20 percent. Last week, Nigeria’s external reserves fell below $36 billion, touching its lowest levels in 29 months. The reserve which shows the country’s ability to weather external shocks dropped to $35.9 billion from a $36.02 billion level on Tuesday, 17 March, according to Central Bank data.

The CBN adjusted currency rates after the COVID-19 outbreak and consequent fallout of OPEC+ alliance pushed oil price to the lowest level since 2016 and beyond comfortable levels for the apex bank with weak external reserves. Following the oil crash of 2016 and devaluation of naira, asset quality of banks deteriorated as loans went bad, especially their exposure to the oil & gas sector where loans were dollar-based. Banks’ non-performing loan surged by 50 percent between December 2016 and September 2017 because it had become too expensive for creditors to repay loans priced in dollars. A clear example was the syndicated loan $1.2bn to Etisalat which put about a dozen banks in precarious positions. Banks were last year mandated by the CBN to lend as much as 65 percent of all their deposits, but priority was for manufacturing and similar businesses. “I think banks have learnt their lessons from 2016 and most of them have been cautious in granting foreign currency loans despite a stable economy since 2007,” said Gbolahan Ologunro, an ana-

lyst at Lagos-based CSL Stockbrokers Ltd. Ologunro explained that the impact of the devaluation and sharp drop in oil price would weaken asset quality of banks but the impact would not be material enough to give rise to significant erosion of capital adequacy levels in the entire industry. According to the banking sector analyst, lenders have since 2017 increased their risk-assessment framework, while some have restructured their loan books and taken additional measures to ensure their obligors have hedge contracts as protective measures. “However, tier-one banks like GTBank, Zenith, Access Bank, UBA are in better position to weather the storm than their mid-tier peers,” he said. Meanwhile the CBN, in light of the coronavirus outbreak, granted all DMBs (Deposit Money Banks) leave to consider temporary and time-limited restructuring of tenure and loan terms for businesses and households most affected by the outbreak, particularly the oil and gas, agric, manufacturing, it said. Bad loans dropped by 50.8 percent year-on-year to N1.139trn at the end of Q3 2019, according to data from National Bureau of Statistics (NBS). Oil & gas saw a decline of 73.64 percent.

Mixed expectations as MPC decides on... Continued from page 2

ance with the expansionary path that most central banks are toeing to minimise the impact of the coronavirus pandemic. “So I expect the MPC to maintain status quo and hold all the policy parameters, especially in view of the fact that it increased the Cash Reserve Ratio from 22.5 percent to 27.5 percent only two months ago,” Uwaleke said. From the CBN’s angle, he said tackling the negative effects of COVID-19 on the economy would require unconventional monetary policy. The apex bank has already risen to the challenge through the stimulus packages it rolled out including the reduction in interest rates for intervention programmes from 9 percent to 5 percent, and its commitment to sustain the LDR of 65 percent which has increased credit to the private sector. This is against the backdrop of rising inflation and the recent upward ‘adjustment’ in the exchange rate which has reduced the value of the naira, a development likely to exert more inflationary pressure. Taiwo Oyedele, head of tax and corporate advisory services at PwC, expects the MPC to adopt measures that will stimulate the economy while keeping inflation under control to stem the upward trend. “MPC’s actions need to be complemented with appropriate fiscal policy responses

in a coordinated manner,” Oyedele said. Nigeria’s inflation rate for the month of February 2020 increased to 12.20 percent from 12.13 recorded in January. But some of the analysts expect the MPC to cut rate. Ayo Teriba, CEO of Economic Associates, said at the theoretical level, the CBN should at least try to mitigate the advance effects of the coronavirus. But the MPC, he said, has not been able to do the ideal thing since 2016. The MPC would like to ease to avoid a recession but it would not be able to do so because of low reserves levels, he said. “If we had adequate level of reserves to meet imports and the demand of capital flow in the short term, then ideally they should ease. But in the absence of reserve adequacy, easing will be dangerous. That is why it is important for them to look for ways to boost foreign reserves,” Teriba said. Ibrahim Tajudeem, head of research, Chapel Hill Denham, said the country was in a critical moment. “The CBN might likely respond to in line with global central banks, by accommodating or embracing a dovish monetary policy stand. And I also expect them to cut rate which is consistent with the measures they introduced last week to provide stimulus to the economy on the back of CONVID19 crisis,” he said.


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POLITICS & POLICY COVID-19: Disquiet in Abuja as ex-MD dies, Atiku’s son infected …Untested lawmakers on the loose …NASS staff, journalists scared of going to work ...APC shuts down Innocent Odoh, James Kwen and Cynthia Egboboh Abuja

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alpable fear has gripped most Abuja residents as a former Managing Director of Petroleum Pricing Marketing Company (PPMC), Suleiman Achimugu, has reportedly become the first to die of the dreaded COVID-19 (Coronavirus) in Nigeria. The former PPMC MD, who reportedly died over night from the virus in Abuja was said to have returned from United Kingdom two weeks ago. According to family sources, he started exhibiting symptoms last Tuesday even as his family reported his condition to the Nigerian Centre for Disease Control (NCDC). The family said officials of the NCDC came to the house and took his blood specimen but they never got back to them. The family further said that as of Sunday afternoon, he was coughing profusely, so they called the NCDC to inquire about his results, which turned out positive. They (NCDC) picked him up and rushed him to Gwagwalada where he reportedly died at 2am Monday morning. His family is currently under quarantine in their house as the NCDC reportedly handled the burial. The late former MD according to sources had mixed up with so many people on his return from the UK. He was said to have attended several meetings, met with so many friends, visited pubs and supermarkets and many others who might have been infected. Just as the FCT residents were grappling with the first death of a high profile person-

ality from the virus, the virus has spread so fast and sparing no one. Another high profile victim of the disease is the son of former Vice President Atiku Abubakar, Mohammed, who tested positive to the virus, bringing the number of confirmed cases to over 35 in the last two days. The Presidential candidate of the People’s Democratic Party (PDP) disclosed that his son contracted the virus via his verified Twitter handle late Sunday evening. “My son has tested positive to coronavirus. The @ NCDCGov (Nigeria Centre for Disease Control) has been duly informed, and he has been moved to Gwagwalada Specialist Teaching Hospital in Abuja for treatment and management. I will appreciate it if you have him in your prayers. Stay safe, coronavirus is real,” he wrote on Twitter. Atiku’s daughter, who also confirmed the incident said in a video “is now a public knowledge that my brother, Mohammed Atiku Abubakar has contracted the coronavirus and is being treated here in Abuja. “We as a family are very sad and hopeful that he will get well very soon. We are thankful for the quick intervention of the NCDC, and for now this is what we as a family have to say. “We will ask that all malicious and insulting messages being sent around to insinuate a deliberate action by my brother to spread this disease knowingly be stopped immediately. We must come together as a people to fight this virus. “I would like to draw people’s attention to good hygiene and social distancing; it is important and vital that we apply these in our lives more than ever,” she said.

According to sources, the estate where the former Vice President’s son lives has been quarantined on Monday as fears have spread that the victim may have come in contact with hundreds of other people, who may have contracted the virus. These two incidents and others breaking out have heightened anxiety and tension in the FCT as residents bemoan their fate in the wake of the deadly virus that has killed over 13,000 people globally with over 300,000 confirmed cases worldwide. There is additional panic that erupted in the FCT when some members of the House of Representatives were said to have returned from some of the high risk countries and allegedly refused to subject themselves to screening at the Airport. Following this development the Presidency on Monday raised the alarm over the refusal of the lawmakers to do the screening which is one of the precautionary measures against the dreaded Coronavirus pandemic. Chief of Staff to the President, Abba Kyari, in a letter to the Speaker of House of Representatives, Femi Gbajabi-

amila, sighted by journalists, asked the House leadership to direct members to comply with the safety measures at the Airport. “As you are aware, these airport screenings are our primary line of defense and refusal by any citizen to subject to these tests is a threat to our nation. “Accordingly, you are kindly requested to direct all members at the House of Representatives, who returned to Nigeria from foreign trips to report themselves to the nearest NCDC test centre with immediate effect”, the letter read. Meanwhile, BusinessDay on Monday gathered that some staff and journalists covering the National Assembly are scared of going to work as on Tuesday. Their fear is even intensified by the alarm raised by the Presidency about some members of the House of Representatives, who have refused to be tested and possibly quarantined. BusinessDay checks showed that the lawmakers that traveled abroad and returned in the last two weeks are coming to office, attending plenary as well as committee meetings.

Among such lawmakers are Benjamin Kalu (APC, Abia), chairman House of Representatives Committee on Media and Public Affairs; Luke Aniofiok (PDP, Akwa Ibom), chairman House Committee on Federal Judiciary, and Matthew Urhogide, chairman Senate Committee on Public Accounts and Senator representing Edo South. While Kalu returned from a country close to China barely a week ago, Aniofiok came back from USA two weeks ago and Urhogide returned from UK about two weeks ago. There are particularly serious agitations by journalists covering the House of Representatives particularly as the Chairman of Media and Public Affairs Committee held briefing with them few days after his return. “The Kalu matter is a serious issue, there is a need to have update from him. A lot of our colleagues met with him before he even came to brief us and we know what that means,” one of the journalists remarked. Also, Secretary to one of the lawmakers who traveled recently said he has been leaving in fear since the return of his boss from one of the high-risk countries, saying he is relying on God for intervention as the lawmaker is no longer coming to office. Similarly, the fear of the spread of killer virus has forced the National Chairman of the All Progressives Congress (APC), Adams Oshiomhole to close down the National Secretariat. Oshiomhole said the closure was in compliance with the Federal government’s directive that people should stay away from large congregations and social gatherings. As soon as this announcement was made, the staff vacated the Secretariat leaving

only security personnel back. Meanwhile, the Governor of Bauchi State, Bala Mohammed has gone into selfisolation, after he had contacts with the son of the former Vice President, Mohammad Atiku Abubakar. According to a statement signed by Mukhtar Gidado, Senior Special Assistant to the Bauchi State Governor on Media, sighted by newsmen, he said his principal shook hands with Atiku’s son recently in Lagos. Although the Federal Government and state governments have shutdown schools, other public institutions and major airports in the country, the measures appear to be coming late in the face of the increasing menace compared to other countries that have long shut their borders, seaports and airports. The action of the Nigerian authorities in the belated shutting down of the airports where most of those that contracted the virus came from was said to have caused the increase in the number of confirmed cases. The alleged late response to the scourge prompted analysts to task government’s ministries, department and agencies to take more proactive measures to curb the pandemic. Speaking to BusinessDay on Monday in Abuja, the Executive Director of Civil Society Legislative Advocacy Centre (CISLAC), Auwal Ibrahim Musa Rafsanjani, said the panic in Abuja is due to Nigeria’s poor record in disaster management. He called on the Ministry of Health, Ministry of Information and Culture and the National Orientation Agency (NOA) to intensify efforts to sensitise and educate Nigerians on the measures to curb the menace.

Coronavirus: Atiku clarifies itinerary of son after trip abroad Iniobong Iwok

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tiku Abubakar, a former vice-president, has said his son Mohammed, who tested positive to the Coronavirus pandemic, did not access open locations but voluntarily submitted himself for testing after returning to the country. Atiku in a Twitter message

last Sunday had revealed that his son tested positive for the deadly Coronavirus. In a statement signed by Paul Ibe, his media adviser, copy of which was sent to BusinessDay, Monday, Atiku clarified the itinerary of his son, saying that after returning to the country on 17th March via Switzerland from business engagements in France and Switzerland, Mowww.businessday.ng

hammed attended a private meeting of six persons same day in Lagos, stayed in his private house for the night and took an Aero 5.20pm flight to Abuja on the 18th. The statement said that Mohammed traveled alone in the Emirates Airline, while also wearing face mask as a precautionary measure since his arrival in Nigeria. He said Mohammed did

not show any symptom of the disease and voluntarily offered himself for testing on arrival in Abuja late on the 18th. The statement further said that Mohammed’s son has since tested negative, while his wife’s result is being awaited, urging Nigerians to disregard the perfidious information that the case accessed open locations. According to the release,

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“On the 19th, NCDC took his blood sample which result came positive on the 20th. He subsequently went into self-isolation to protect his family within his own house. “Meantime, his son has since tested negative while his wife’s result is being awaited. The two persons are currently in self-isolation. We urge members of the public to disregard the perfidious @Businessdayng

information that the case accessed open locations. He was not at Play Lounge or any other club in Abuja as being mischievously bandied about. “The case neither attended the Friday Jumu’a prayers nor any social gathering until his evacuation to Gwagwalada Specialist Hospital on the 20th where he is being treated and managed.”


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Tuesday 24 March 2020

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BUSINESS DAY

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FINANCIAL TIMES

World Business Newspaper

SoftBank plans $41bn asset sale to cut debt amid coronavirus tumult

Response to halving of share price includes plan to repurchase ¥2tn of its own stock Kana Inagaki, Miles Kruppa, Ortenca Aliaj, Eric Platt

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oftBank is launching an emergency ¥4.5tn ($41bn) asset sale to fund a share buyback and debt reduction, in a determined effort by Masayoshi Son to stem a collapse in the company’s share price sparked by the coronavirus crisis.  Shares in the Japanese technology group soared almost 19 per cent on Monday after it unveiled the programme, which includes a plan to repurchase ¥2tn of its own shares on top of the ¥500bn buyback it promised 10 days ago. Combined, SoftBank would be repurchasing 45 per cent of its stock. “This programme will be the largest share buyback and will result in the largest increase in cash balance in the history of SBG [SoftBank Group], reflecting the firm and unwavering confidence we have in our business,” Mr Son, the group’s founder and chief executive, said in a statement.  SoftBank did not disclose which assets it would sell over the next 12 months from its sprawling portfolio, but analysts are focusing on its $140bn stake in Chinese ecommerce group Alibaba. 

The asset sale comes amid a tumultuous period for the Japanese conglomerate. On Monday the Financial Times reported that Leon Black’s Apollo Global Management hedge funds had placed a large short bet against bonds issued by SoftBank, a trade that Apollo had discussed with investors at a presentation in December, according to two people in attendance, citing concerns over SoftBank’s debt load. Meanwhile, the conglomerate’s woes over its investment

in lossmaking office space provider WeWork entered a newly acrimonious phase this week, as two of WeWork’s directors, Bruce Dunlevie and Lew Frankfort, publicly attacked the Japanese conglomerate over its attempts to renege on an agreed purchase of $3bn of WeWork’s stock. “Not only is SoftBank obligated to consummate the tender offer as detailed by the master transaction agreement, but its excuses for not trying to close are inappropriate and

dishonest,” the pair said on Sunday. SoftBank’s new programme would represent about 17 per cent of the $245bn in assets SoftBank currently owns, which also includes US carrier Sprint and UK chip designer Arm. Elliott Management, the $40bn US activist fund, recently built a $2.5bn stake in SoftBank, demanding a $20bn share buyback and greater transparency for the $100bn Vision Fund.  SoftBank’s share price has halved over the past month

due to market concerns that the group, which is already saddled with net debt of $55bn, will face a bigger financial burden as its investments in ride-hailing and hotel groups are hit by the economic fallout of the coronavirus pandemic. Among its other investments backed by its Vision Fund, Oyo Hotels, the Indian hospitality start-up, is reducing its workforce in China, while operating losses at London-based tech company Improbable Worlds jumped almost two-thirds in its latest financial year.  “We know that the Vision Fund could be dangerous but we don’t know where or how much,” said Kirk Boodry, a tech analyst at Redex Holdings who publishes on research platform Smartkarma.  “When the bad things come out, people are now ready to have something to fall back on.” SoftBank paired its share buyback announcement with a plan to pay down its debt, a move that came after credit-rating agency S&P Global recently cut its outlook on the company.  “The issue [for investors in SoftBank] was that they had the ability to sell assets in order to make a much stronger balance sheet and they just didn’t seem to want to do it until now,” said Mr Boodry.

Shell and Total slash costs and suspend buybacks

Energy groups rush to protect themselves from coronavirus and oil market turmoil Anjli Raval and David Keohane

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oyal Dutch Shell and Total suspended their share buyback programmes and announced billions of dollars in capital and operational spending cuts as the energy majors seek to buffer themselves against oil market turmoil. The coronavirus pandemic that has hit the global economy has curtailed demand for oil, while a price war led by Saudi Arabia has depressed prices further, taking Brent crude last week to a 17-year low. Shell said on Monday it was taking steps to ensure its “financial strength and resilience”.  The Anglo-Dutch group will not continue with the next tranche of its share buyback programme. It said it still intended to repurchase $25bn of shares but would miss its year-end

Ben van Beurden, chief executive of Shell © Reuters

completion target. The company said it would also cut capital expenditure to $20bn or less this year, from initial plans for $25bn in 2020, while reducing operating costs by $3-4bn versus levels from last year. Along with “material reductions” in working capital, Shell www.businessday.ng

said this would contribute $8bn$9bn of free cash flow on a pretax basis. However, this will not be enough to make up for the drop in oil prices since January. The company said its dividend policy, for now, would remain in place as would its plans to sell at least $10bn of assets. But it said the timing of these

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divestments would depend on “market conditions”. “The combination of steeply falling oil demand and rapidly increasing supply may be unique, but Shell has weathered market volatility many times in the past,” said Ben van Beurden, chief executive. Patrick Pouyanné, Total’s chief executive, said on Monday it, too, would cut capital spending by about 20 per cent to less than $15bn. The French group will also aim for another $500m in cost savings versus 2019 and suspend its share buyback programme, which had $1.45bn left to run this year. With oil prices now below $30 per barrel, Total faces a cash gap of $9bn compared with the situation it would have been in with oil at $60 per barrel. The group’s current pre-dividend breakeven, the point at which it can finance its current investments, @Businessdayng

is less than $25 per barrel. In a video to Total’s staff, Mr Pouyanné addressed the fact that the $5bn in cost savings would fall well short of the $9bn needed. “We’ll be using our solid balance sheet of low levels of debt,” he said. “Hence our decision to deleverage so we could react to such volatility in oil prices. We will be able to borrow $4bn, for debt gearing of 2 per cent, so no worries on that score.” Norway’s Equinor and Italy’s Eni said last week that they would scrap their share buyback programmes for this year while re-evaluating spending plans. UK rival BP has said it plans to reduce capital and operational spending. In the US, Chevron said it aimed to cut expenditure and lower oil output in the short term, while ExxonMobil said it would make “significant” spending cuts.


38

Tuesday 24 March 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Investors braced for big dividend cuts

ITV, IWG, Fuller’s and Kingfisher join companies set to end decade-long run of bumper payouts Daniel Thomas

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nvestors are braced for savage cuts in dividends across the FTSE 350 as companies hoard cash to see them through the coronavirus

crisis. On Monday, a further wave of dividend suspensions and cancellation of buybacks were announced by companies scrambling to assess the hit to their earnings from the pandemic. ITV said scrapping its dividend would save about £300m, and withdrew its guidance because of the drop in advertising spend and halt in production. IWG, the shared office provider, will not pay its final dividend and suspended a £100m share buyback as coronavirus forced the closure of properties. Fuller’s, the pub company, withdrew its forecast and said it would consider cutting its dividend after the government forced the closure of bars, pubs and restaurants. Royal Dutch Shell is to halt its share buyback programme. Kingfisher delayed its full-year results following the Financial Conduct Authority request, and said there would be no final dividend. Stagecoach said uncertainties caused by the impact of Covid-19 would mean any further dividends this year would be unlikely. The rout began at pace last week, when groups spanning William Hill and Marks and Spencer heaped further pain on shareholders already suffering losses in their portfolios from the

market sell-off. The pandemic appears set to end the decade-long run of bumper payouts for incomehungry investors. Since the end of the financial crisis, FTSE 100 dividend payments have almost doubled from £46bn in 2009 to about £90bn declared so far for 2019, according to stockbrokers AJ Bell. Special dividends and buybacks have been paid out on top. Analysts had expected a further 2 per cent increase in dividend payments to £91.5bn, but Russ Mould, investment director at AJ Bell, said this was “starting to look optimistic”. More than a dozen companies have already cut or suspended payouts in the UK. Many are in consumer-facing industries, such as pub groups Marston’s

and Wetherspoons, while the cancellation of sporting events forced William Hill and Playtech to take action. Housebuilders including Travis Perkins and Crest Nicolson have also cancelled final payouts this year, alongside retailers such as M&S. Next and National Express are among a second group of companies that are considering reduced shareholder payouts. Investors are worried that dividend cover from earnings has become overly optimistic given an unprecedented drop in consumer demand across industries, and the knock-on effect on areas such as manufacturing and supply chains. “With many governments pursuing a ‘close everything down’ strategy, the deterioration in

corporate cash flows is growing by the day,” said analysts at Stifel, which warned about the impact on funds and the dividends that they are able to pay. Coronavirus business update How is coronavirus taking its toll on markets, business, and our everyday lives and workplaces? Stay briefed with our coronavirus newsletter. Sign up here The FTSE 100 offers a forward yield of 6.5 per cent — an artificially high level, according to investors, that will mean further cuts to come given falling earnings cover as the coronavirus crisis continues.  Many companies now offer yields in the double-digits, but earnings cover stands at about 1.7 times on average across the FTSE 100, which is seen as low

by analysts even before earnings come under pressure owing to the coronavirus outbreak. Trevor Green, head of institutional equities at Aviva Investors, said the stated dividend yield for the FTSE 100 was now “hugely” open to question. “Some companies have chosen to cut dividends immediately, but others are likely to follow as management will have to balance being loyal to staff and keeping retention rates high with shortterm cuts to dividends,” he said. Often the dividend cut has come with the admission that these companies have started talking to their banks about covenants and drawing down credit facilities as they seek to secure cash and debt positions. If a well-funded and carefully run retailer such as Next was even thinking of cutting, Mr Mould said, “then frankly pretty much no one is safe, barring maybe the utilities and even there they could be asked to give customers more time to pay their bills”. He pointed to companies such as cruise ship operator Carnival and ITV, if it faced a prolonged advertising slowdown following cancelled sporting events. A sustained downturn in economic activity could weigh on commodity prices, and in turn on payouts from groups such as Glencore, while BP and Shell are in focus, given the sharp fall in oil prices. As well as cutting dividends, companies could also find themselves unable to pay a final dividend if they were forced to delay or suspend their annual meetings. 

Fed pledges unlimited bond buying to steady market Central bank ramps up firepower to address economic crisis from coronavirus James Politi, Brendan Greeley and Colby Smith

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he Federal Reserve has committed to unlimited purchases of US Treasuries and agency mortgage-backed securities and set up additional lending tools to shore up struggling companies and financial markets. The new moves, announced on Monday, add monetary firepower to America’s efforts to support its economy through the coronavirus pandemic. “The Federal Reserve is committed to using its full range of tools to support households, businesses, and the US economy overall in this challenging time,” the Fed said in a statement.

“While great uncertainty remains, it has become clear that our economy will face severe disruptions. Aggressive efforts must be taken across the public and private sectors to limit the losses to jobs and incomes and to promote a swift recovery once the www.businessday.ng

disruptions abate,” it said. The Fed had originally planned to purchase at least $500bn in US Treasuries and at least $200bn in agency mortgage-backed securities. In recent days it has sped up the pace of these purchases, after earlier interventions failed to ad-

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dress strains that had emerged in both debt markets. By Friday, it had already completed roughly half of its planned Treasury purchases, as well as about a third for the agency mortgage-backed securities. Following a meeting of the Federal Open Market Committee, its monetary policy setting committee, the US central bank is no longer putting a numerical cap on its purchases of Treasuries and mortgage-backed securities, instead signalling that it is prepared to act as much as necessary. The Fed also unveiled two new facilities that allow it to purchase corporate bonds, including new issues. Another facility called TALF — revived from the 2008 financial crisis — gives the Fed the ability to buy @Businessdayng

securities backed by student, car and credit-card loans, as well as loans to businesses through the Small Business Administration. The Fed also expanded existing programmes to ease strains in the markets for municipal debt and the short-term loans known as “commercial paper.” The Fed also said it would soon announce a “Main Street Business Lending Programme” to lend directly to small businesses. The central bank’s intervention on Monday sent US stockindex futures soaring almost 8 per cent from early losses to trade around 3 per cent higher. A rally in US government debt accelerated, with the 10-year Treasury yield down 0.2 percentage points to 0.742 per cent. Yields fall when prices rise.


Tuesday 24 March 2020

BUSINESS DAY

FT

39

ANALYSIS

Coronavirus: can the ECB’s ‘bazooka’ avert a eurozone crisis?

Much may depend on whether Germany is willing to bail out Italy Ben Hall, Martin Arnold and Sam Fleming

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s the Italian death toll from the Covid-19 epidemic reached grim new heights last Sunday, Pope Francis broke strict quarantine rules to visit the church of San Marcello in central Rome. The pontiff went to pray for a miracle before a crucifix which the pious believe helped save the city from plague in 1522. Around him was a country in lockdown and a continental economy in freefall, as the virus spread across Europe, freezing factories, snarling borders, shuttering high streets and confining hundreds of millions of citizens to their homes. Workers, business leaders and investors were seeking deliverance not only from the almighty, but from EU policymakers, who they implored to stop the slump from turning into a lasting depression that could destroy the eurozone. For a moment last week, it looked like at least some of those prayers had been answered. The European Central Bank stunned global markets on Wednesday night with an audacious plan to expand its asset purchases by a vast €750bn over the next nine months. European bond markets immediately rallied as the scale of the ECB’s intervention became plain, reducing the financing costs of governments from Italy and Greece to Germany and France. “There are no limits to our commitment to the euro,” Christine Lagarde, the ECB president, wrote on Twitter after the plan was unveiled. But senior policymakers are under no illusion that the central bank’s move can alone cure the region’s profound economic crisis. Ms Lagarde will need to confront scepticism within the ranks of her own institution and expand the central bank’s monetary interventions as the downward

economic spiral worsens. And the euro area’s leaders — deeply divided and focused on domestic policy responses to their own national crises — will need to rally behind the single currency with co-ordinated policies if they are to rebuild a region entering a profound economic contraction. Europe now faces its worst crisis since the war, says Paolo Gentiloni, the EU’s economics commissioner. “The union project was born after a war. After a successful common fight against this terrible pandemic it could flourish, or it could be dramatically weakened. So this for me as an Italian is a wake-up call for all of us in the European institutions.” So far the fiscal response to the coronavirus has been halting and overwhelmingly national. The German, French, Spanish and Italian governments have outlined large support packages, but, perhaps apart from Berlin, which on Monday will present a supplementary budget with €150bn in new borrowing, none yet on the scale needed to replace lost wages and cancelled business. Brussels has announced successive relaxations of its fiscal rules, but for countries such as Italy there appeared to be little sign of solidarity from northern Europe — an impression compounded in Rome when Germany initially banned exports of medical masks to any of its EU partners. Investor alarm in recent weeks was amplified by the ECB, which until Wednesday struggled to deliver policies to match the scale of the economic threat. It expanded its bond-buying programme and agreed a vast new scheme to, in effect, pay banks to lend to smaller companies. But its initial reaction compared unfavourably with the US Federal Reserve’s two emergency rate cuts, massive asset purchases and repeated injections of liquidity into the banking system. Ms Lagarde further undermined market confidence with www.businessday.ng

highly damaging comments suggesting she was unwilling to stop differences between Italian and German borrowing costs from blowing out to dangerous levels. In 2012, when a debt market sell-off ripped through the eurozone’s more vulnerable southern economies, it took then ECB president Mario Draghi’s promise to do “whatever it takes” to prevent a self-fulfilling prophecy: that a country like Italy would be ejected from the eurozone because its borrowing costs, and its debt burden, were too high. But Ms Lagarde appeared to be walking back from that commitment — a dangerous impression to give. Investors began to reprice the risk of sovereign bonds, selling off Italian government debt and sending yields soaring. The sharply widening spread, or interest rate differential, between Italian and German government debt, suggested the eurozone was heading for a crisis. The lack of co-ordinated European action seemed all the more extraordinary because the eurozone has considerable crisisfighting tools created during its brush with a break-up in 2012. “In this pandemic we are dealing with many difficult and complex issues. But this one, preventing another eurozone crisis, is very obvious,” says Olivier Blanchard, a former chief economist of the IMF. “When a doctor knows what to do but doesn’t prescribe [the medicine], it surely is criminal.” Following an emergency meeting on Wednesday evening, Ms Lagarde made amends. The ECB’s €750bn Pandemic Emergency Purchase Programme was the kind of intervention that the markets had been calling for and which certain governments — Italy, Spain, France — had been demanding. The impact was immediate. The yield on Italian bonds fell by some 80 basis points, or about a third, as did those on Spain, Portugal, France and Greece which all have

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high public debt. The ECB also said it was prepared to review the self-imposed limits on its bond-buying. These limits were put in place — at the behest of more hawkish eurozone members — to ensure that the central bank does not buy so many bonds that it is accused of directly funding national governments, which would break EU law. But they have sowed doubts in the minds of investors and some governments about the extent of the ECB’s commitment to intervene on bond markets to save the euro. The ECB’s intervention provides immediate relief for Italy’s banking sector, which is still saddled with excessive levels of non-performing loans and heavily loaded with government debt. Soaring yields — which go hand in hand with falling prices — would have forced Italian lenders to mark down the value of their bond holdings and trim back on lending to cover losses, a nightmare scenario for an economy deep in trouble. There are already worries about the impact of the crisis on the European banking sector. Share prices have halved this year to levels last seen in the 1980s. “It is inevitable that some borrowers will default,” says Clemens Fuest, president of the Ifo economics institute in Germany. “If banks lose equity as a result, capital regulations could force them to call in other loans as well, exacerbating the crisis.” The ECB has attempted to ease the strain in two ways; first by offering lenders some €3tn of cash at negative interest rates that mean they get paid to take money from the central bank; and second by allowing banks to eat into capital buffers to absorb any hit from loan defaults. The question is whether it will be enough. Officials say the package will only help to keep banks lending and avoid a credit crunch if governments take concerted action of their own. @Businessdayng

“The ECB can provide the banks with liquidity,” says Isabel Schnabel, executive board member at the central bank. “But that doesn’t necessarily mean that banks really lend to companies in trouble because of the virus. That’s where the state comes in. It can support the economy, for example by giving credit guarantees.” Carlo Cottarelli, another former IMF official, believes the ECB’s new emergency programme would be eligible to buy up to 68 per cent of all new Italian government bonds issued this year — including maturing debt and new bond issues to fund stimulus measures. It gives Rome a significant cushion. “This is quite a number,” he says. “It is not infinite. It is not ‘whatever it takes’ but it is pretty large.” Mr Cottarelli made his calculations on the basis of a public deficit of 5 per cent of gross domestic product this year. The shortfall may be much worse. Capital Economics estimates that eurozone budget balances will deteriorate by between 10 and 15 percentage points of GDP this year. If that were the case, it could force the ECB to come back with an even bigger package and lift the limits on whose bonds it can buy. Germany’s €150bn debt increase will give the ECB more headroom, but eventually Ms Lagarde will have to challenge the orthodox faction within the ECB council — led by Germany’s Bundesbank — which she has so far been tiptoeing around. When Ms Lagarde took on the role last November, she promised a more consensual leadership style. Instead, she is now showing she is prepared to override the reluctance of monetary conservatives in her institution by considering an increase to the ECB’s self-imposed limits on its bond-buying programme. But she

Continues on page 40


40

Tuesday 24 March 2020

BUSINESS DAY

NATIONAL NEWS FT Kurzarbeit: a German export most of Europe wants to buy Subsidy system for workers on the verge of being laid off becomes a model

Guy Chazan and Richard Milne

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he US is facing a tidal wave of jobless claims as the economic impact of coronavirus spreads across rust-belt states and beyond. In Germany, the hope is that a tried-and-tested policy tool, designed specially for such economic downturns, will keep mass unemployment firmly at bay. The tool is Kurzarbeit, or shorter work-time, a policy that has been copied by so many other countries that one economist called it one of Germany’s “most successful exports”. Under the scheme, companies hit by a downturn can send their workers home, or radically reduce their hours, and the state will replace a large part of their lost income. A way for firms to hang on to skilled workers during a downturn, it “is one of the reasons why Germany recovered so quickly after the 2008-9 crisis”, said Anke Hassel, professor of public policy at the Hertie School in Berlin. With their tradition of strong welfare states, Denmark, Sweden and Norway have all followed Germany by introducing large subsidies for workers who might otherwise be laid off. The UK is now moving to introduce a similar programme: on Friday, Rishi Sunak, the chancellor, unveiled a coronavirus jobretention scheme under which employers can apply for a grant to cover most of the wages of people who have been furloughed and kept on the payroll, rather than laid off. Such grants, the UK Treasury said, will cover 80 per cent of the salary of such retained workers, up to a total of £2,500 a month. Kurzarbeit follows a similar

Kurzarbeit, or shorter work-time, has been used since the early 1980s but came into its own during the 2008-9 financial crisis © AP

principle. Temporarily laid-off workers receive “Kurzarbeitergeld” or “short-work money” from the Federal Labour Office (FLO), the agency that is also responsible for issuing unemployment benefit. The scheme promises them 60 per cent of their pre-crisis pay. Take-up is expected to shoot up in the coming days and weeks as coronavirus-related turbulence spreads through the eurozone’s largest economy. In the past few days, industrial giants such as Volkswagen and BMW have suspended production in many of their plants, smaller Mittelstand businesses have had revenues and orders melt away while lockdowns have forced restaurants, pubs and hotels to close. The scheme has existed since the early 1900s, but came into its own after the Lehman Brothers collapse of 2008. “It really contributed to the resilience of the German

labour market following the global financial crisis,” said Alexander Hijzen, an economist at the OECD. Partly thanks to Kurzarbeit, Germany’s unemployment rate fell from 7.9 per cent at the start of the great recession to 7 per cent in May 2009. By contrast, unemployment for the OECD as a whole rose by 3 percentage points during the same period, to 8.6 per cent. An OECD estimate said that, by the third quarter of 2009, more than 200,000 jobs may have been saved in Germany as a result of short-time work. Behind the scheme’s success was its well thought-out design: it was ramped up fast in the initial phase of the 2008 crisis “but phased out quickly in the subsequent recovery”, said Mr Hijzen. By contrast, other countries with similar programmes, such as Belgium and Italy, “use them more intensively in good times when they are less needed”. Meanwhile,

in the Netherlands, “procedures are too complicated . . . to allow for a rapid take-up during economic crises”. Ms Hassel said Kurzarbeit was perfectly tailored for a country such as Germany with such a strong commitment to vocational training. “Companies invest a lot in improving the skills of their workforce and, if there’s a crisis, they shouldn’t be forced to let them go,” she said. “If they do, they won’t be available in six months’ time.” It was not surprising, then, that Kurzarbeit was one of the first tools the government grasped when the coronavirus crisis began to bite. This month the Bundestag rushed through legislation to expand the scheme and ease access to Kurzarbeitergeld: from now on, companies can register when just ten per cent of their workforce is impacted by an economic crisis, down from a third previously.

The government now expects some 2.35m people to be drawing Kurzarbeitergeld, at a cost to the FLO of €10.05bn. The figure is much higher than the 1.4m who were receiving short-work money at the height of the global financial crisis. But the FLO, which is financed through contributions from workers and employers, has built up reserves of €26bn, much more than it had at the end of the 2000s. Coronavirus business update How is coronavirus taking its toll on markets, business, and our everyday lives and workplaces? Stay briefed with our coronavirus newsletter. Sign up here Other countries with short-time work schemes have also tweaked their rules since the crisis began. Spain recently modified its ERTE system to ensure that workers temporarily suspended from their jobs can draw around 70 per cent of their salaries as social security. France has also greatly expanded its existing chomage partiel (partial employment) system. Bruno Le Maire, the finance minister, said his €45bn of emergency measures included €8.5bn for two months of such state payments to laid-off workers. Yet some economists wonder whether Kurzarbeit is adequate to the challenge now facing companies in Germany and beyond, many of which are fighting for their survival. Some firms may be past the point where wage subsidies will help. “The big problem is that SMEs are having a really hard time generating revenues,” said Marcel Fratzscher, head of DIW Berlin, a think-tank. “We’re moving to a situation where direct financial transfers are needed.”

Coronavirus: can the ECB’s ‘bazooka’ avert a eurozone crisis? Continued from page 39 faces daunting battles as she seeks to manage a board deeply divided between doves and hawks. “What I find most interesting is the political power play that is going on behind the scenes,” says Frederik Ducrozet, strategist at Pictet Wealth Management. “I underestimated her willingness to fight this battle.” Just as when Mr Draghi took over as president in 2011 the divisions within the ECB are mirrored by a broader battle being played out at political level in Europe between those in favour of closer fiscal and political integration and those suspicious of it. This time the divisions are entrenched by the rise of Eurosceptic populism, which in Europe’s south decries a lack of eurozone solidarity and in the north feeds on fears

richer countries will have to pay for poorer ones. Against a backdrop of bickering over the EU’s budget, followed by spats between leaders over border closures and medical supplies being blocked, the early signs in this crisis are not reassuring. “This is a global shock,” says Pablo Hernández de Cos, governor of the Bank of Spain. “Spain is already there, with the virus spreading fast, and it will be the same for the rest. The fiscal response should not only be coordinated but common in the eurozone, meaning mutualised debt at least temporarily. This will prove to citizens the complete power of European monetary union in their lives.” France and Italy are among the most vocal advocates of radical fiscal action, as they urge eurozone leaders to back the ECB with tools www.businessday.ng

of their own. Critically, the region’s European Stability Mechanism bailout fund has €410bn of lending capacity which is currently unused. Officials have been examining the idea of offering precautionary ESM credit lines to multiple member states — a move that could in turn unlock further ECB firepower in the form of its Outright Monetary Transactions, under which it can buy unlimited amounts of shorter term bonds. Yet the idea of using the ESM has become a political “nightmare” in Italy says Pier Carlo Padoan, a centre-left MP and former Italian finance minister, because the government’s Eurosceptic opponents say it would bring austerity and debt restructuring. “The ESM is poisonous. If you touch it you die.” Another possible mechanism is a so-called “corona bond”, which

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could be issued by European institutions to help rebuild member states’ economies. All this is linked with a longstanding push by capitals including Paris for euro area countries to pool more of their fiscal resources to strengthen the single currency’s underlying structures. “The response to the pandemic needs to be forceful, co-ordinated, ambitious and urgent,” says Gabriel Makhlouf, governor of the Irish central bank. “It needs every EU government and institution to play its part.” Officials were working at the weekend on several joint fiscal proposals aimed at tackling the crisis. But aspirations for deeper fiscal integration have reawakened familiar divisions. Opposition is led by Germany and the Netherlands, which have long been far more sceptical @Businessdayng

about eurozone risk-sharing. Yet Berlin’s ultimate position has yet to be revealed. Angela Merkel, the German chancellor, has not publicly attacked other national leaders such as Emmanuel Macron, the French president, who are pushing these ideas. One of the side-effects of the ECB’s bold move was to buy time, alleviating pressure on northern European capitals to agree to more joint fiscal burden sharing in response to the crisis. For many policymakers, time is just what the euro area lacks, given the scale of the economic collapse under way. Bruno Le Maire, France’s finance minister, put the challenge starkly last week: “Either the eurozone responds in a united manner to the economic crisis and emerges stronger, or it is at sixes and sevens and is in danger of disappearing.”


Tuesday 24 March 2020

BUSINESS DAY

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@Businessdayng

41


42

Tuesday 24 March 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Monday 23March 2020

Top Gainers/Losers as at Monday 23 March 2020 LOSERS

GAINERS Company

Closing

Change

WAPCO

N10.65

N10

-0.65

0.9

DANGSUGAR

N10.15

N9.85

-0.3

N6.6

0.6

UBA

N5.35

N5.05

-0.3

VOLUME (Numbers)

N5.5

N6

0.5

FBNH

N4

N3.7

-0.3

VALUE (N billion)

N3.75

N4.05

0.3

SKYAVN

N2.57

N2.32

-0.25

Closing

Change

JBERGER

N20.2

N22.15

1.95

ZENITHBANK

N11.9

N12.8

N6

UBN EKOCORP PZ

Company

ASI (Points)

Opening

Opening

DEALS (Numbers)

MARKET CAP (N Trn)

22,705.19 6,981.00 551,483,188.00 5.755

S

tocks in Nigeria, Eu ro p e a n d t h e U.S. fell on Monday March 23 as spread of coronavirus rattles markets. In U.S, stocks tumbled despite Federal Reserve (Fed) latest stimulus move for additional support for the financial system. Nigeria equities remained volatile, declining by 2.24 percent given the circumstances surrounding the macro-economy and oil prices amid the spread of coronavirus. The US central bank plans to expand purchases of government bonds and mortgage-backed securities and provide new financing for households and firms. Financial markets in Europe and the US have continued to fall despite fresh action by the Federal Reserve to support the American economy. The Dow Jones and S&P 500

fell almost 3percent in opening trade in New York, while the Nasdaq was down more than 1.5percent. In London, the FTSE 100 was trading more than 3percent lower, while main indexes in Frankfurt

and Paris were down about 1.5percent. Earlier, Asian stock markets had fallen sharply. Nigeria equities traders priced-in the economic impact of rising coronavirus confirmed cases in Nigeria

Fidelity Bank to pay N5.79bn as dividend amid N30.35bn PBT in FY’19 …stock down 17.6% year-to-date

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n respect of the 2019 financial year ended December 31, the Board of Directors of Fidelity Bank Plc recommended a dividend of 20 kobo per ordinary share amounting to N5.793billion. T h e B a n k ’s a u d i t e d financial results for the period under review which was released to the investing public on Monday March 23 shows it grew gross earnings by 14percent to N215.515billion from N189.005billion in 2018. Net Interest Income (NII) printed higher at N83.055billion from N73.356billion in 2018, up 13.2percent. Profit Before Tax (PBT) increased by 21percent t o N 3 0 . 3 5 3 b i l l i o n f ro m N25.089billion while Profit After Tax (PAT) increased by 24percent to N28.425billion from N22.926billion. At N1.69kobo the stock

closed on Friday March 20, it nears its 52-week low of N1.40kobo, against a 52week high of N2.42kobo. Fidelity Bank share price has declined by 17.6percent this year, underperforming the NSE ASI which yielded negative year-to-date (Ytd) return of -17.30percent as at same day. The bank will at its forthcoming Annual General Meeting (AGM) seek shareholders’ approval to pay the dividend. If approved, the dividend will be paid to

Nnamdi Okonkwo www.businessday.ng

shareholders whose names appear on the Register of Members at the close of business on April 17, 2020. The proposed dividend is subject to Withholding Tax at the appropriate tax rate, which will be deducted before payment. To t a l N e t L o a n s & Advances of Fidelity Bank Plc increased to N1.276trillion as against N961.513billion in 2018, up 32.8percent. Total Deposits rose by 25.1percent to N1.225trillion from N 979.413billion while Total Assets of N2.114trillion in 2019 as against N1.719trillion in 2018, represents 22.9percent increase. Cost to Income Ratio (CIR) decreased to 76.3percent from 78.2percent in 2018, down 1.9percentage point. Return on average equity (ROAE) increased by 1.7percentage point to 13.3percent from 11.6percent in 2018.

FTSE 100 Index 4,966.18GBP -224.60-4.33%

Nikkei 225 16,887.78JPY +334.95+2.02%

S&P 500 Index 2,207.17USD -97.75-4.24%

Deutsche Boerse AG German Stock Index DAX 8,680.34EUR -248.61-2.78%

Generic 1st ‘DM’ Future 18,288.00USD -752.00-3.95%

Shanghai Stock Exchange Composite Index 2,660.17CNY -85.45-3.11%

11.832

Stocks close negative as markets remain volatile Stories by Iheanyi Nwachukwu

Global market indicators

Dangote Cement to issue maiden series of its N300bn bond which rose to 35 as at Monday. Nigeria’s equities year-to-date (YtD) returns currently stands at -19.15percent. Month-todate (Mtd), the market has declined by 17.22percent. The value of listed equities o n t h e Ni g e r i a n S t o c k Exchange (NSE) decreased by N260billion to N11.308trillion from day open level of N11.568 trillion; while the NSE All Share Index (ASI) printed lower from 22,198.43 points to 21,700.98 points. Nigerian Breweries recorded the highest decline from N30 to N27, losing N3 or 10percent while CAP Plc advanced most from N19.5 to N21, adding N1.5 or 7.69percent. Zenith, GTBank, FBN Holdings, Access Bank and UBA were actively traded stocks. In 5,883 deals, equity dealers exchanged 464,363,989 units valued at N3.865billion. “ We e x p e c t m a r k e t sentiment to remain volatile, given the circumstances surrounding the macroeconomy and oil prices.

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a ng o t e C e m e nt Plc notified the Ni g e r i a n S t o c k Exchange (NSE) of its inaugural issuance of bonds under its N300billion shelf registration programme. The company said it has obtained approvals from its Board of Directors to access the capital market for the medium term debt funding. The process of obtaining requisite approvals from the Securities and Exchange Commission (SEC) for the issuance of the Series 1 bond has begun. Dangote Cement Plc intends to issue the maiden series of bonds imminently, subject to obtaining regulatory

approvals and favourable market conditions. The proceeds of the Series 1 Bonds will be used to refinance existing short term debt previously applied towards cement expansion projects, working capital and general corporate purposes. Book building for the Series 1 bonds w ill commence following approval of the transactions by the SEC. Dangote Cement Plc is Nigeria’s largest company by market capitalization and the largest cement producer in Sub Saharan Africa (SSA) with an installed capacity of 45.6Mta across operations in 10 African countries.

FATE Foundation appoints new board members

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AT E F o u n d a t i o n has announced the appointment of seven new members to its Board of Directors. Their appointment was confirmed on Wednesday February 19, 2020 during the 54th Board of Directors meeting in Lagos. The new elected members include; Yinka Sanni is the Chief Executive of Stanbic IBTC Holdings Plc, a member of the Standard Bank Group, Africa’s largest bank by assets and also doubles as the Chief Executive, Standard Bank West Africa. He has a wealth of experience spanning close

to three decades in financing, capital raising, M&A and privatization advisory. Juliet Ehimuan is the Countr y Director for Google Nigeria and is leading G oogle’s business strategy in West Africa and the Next Billion Users initiative in Africa. Under her leadership, the Google team has made significant impact on local content development, infrastructure deployment and digital capacity building. Bolaji Agbede currently serves as the Group Head, Human Resources for Access Bank Plc where she leads the Bank’s reputable human

capital. With over 20 years’ experience, she is renowned for her unrivalled passion, strong leadership qualities, enthusiasm for learning and change, as well as flair for driving excellence. Olusola Adeola is the Executive Director of Designing Futures. She has over 14 years’ work experience as a strategy and organization development consultant working across the private sector, the public sector and the development sector to create organizational structures and systems, and effectively deploy resources.

Mutual Funds to hit N1.5trillion in 2020- SEC

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he Securities and Exchange Commission (SEC) has expressed optimism that Collective the cumulative value of Mutual Funds in the capital market will reach N1.5 trillion before the end of the year 2020. Mutual Funds are managed on behalf of investors by professional money managers.

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They are invested in ventures capital, stocks, bonds and other securities. Mary Uduk, acting Director General SEC stated this over the weekend at the Capital Market Correspondents Association of Nigeria (CAMCAN) forum sponsored by the commission in Lagos. Uduk said the commission @Businessdayng

was setting up more strategies to develop the mutual fund segment in the Nigerian capital Market. Uduk who was represented by the head, office of economics at SEC, Okey Umeano, noted that the segment which currently stands at N1.2 trillion is growing and urged retail investors to use the funds as a means to access the market.


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Hamid Joda: Spurring financial inclusion through non-interest banking ENDURANCE OKAFOR

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ith over 20 years of banking experience covering Treasury, Business Development, Consumer/Retail Banking, Branch Banking and the Public Sector, Hamid Joda, founder/ chief operating officer of TAJBank Limited, a new non-interest bank in Nigeria is one of the industry leaders working to make inclusive financial inclusion a reality in Nigeria. Joda, an MBA graduate from Bayero University, Kano began his career at Niger Insurance plc in 1999 before moving to City Express Bank Limited, Lagos, where he held the position of Senior Supervisor. He also worked at Continental Trust Bank Limited, Kano, as a Senior Analyst and at the defunct Oceanic Bank International Nigeria Limited. He was the pioneer Branch Manager of Fidelity Bank plc, Kano, from where he rose to the position of Area Manager in charge of the North East. With a BSc in Business Administration (Banking & Finance) from the University of Maiduguri Joda’s extensive experience led him to First Inland Bank (Finbank plc) Abuja, as Group Head Retail Banking (North), where he later rose to become the Divisional Head, Retail Banking of the bank. He was also the Divisional Head, Public Sector, First City Monument Bank (FCMB) Limited. Joda, a member of the Chartered Institute of Banking of Nigeria (CIBN), led a team that realised the vision of setting-up the second non-interest bank in Nigeria. Under his leadership, TAJBank since receiving its regional licence from the Central Bank of Nigeria (CBN) on July 12, 2019 has been working towards achieving its vision of being ranked among the top ten banks in Nigeria by the year 2025. With core values that include, trust and justice, customer-centric, excellence, determination, and innovation TAJBank has a mission to build a sustainable, ethical brand through exceptional service and professionalism while enhancing stakeholders’ value.. As one of the measures to give affordable financial services to Nigerians who are either financially excluded or underserved, TAJBank partnered with Smart Save Integrated Technologies Limited to allow people save money from even earnings that could be considered ‘little’ towards achieving a target. According to the World Bank, access to a basic savings account is the first step toward achieving

Joda

financial inclusion. Aimed at reducing Nigeria’s financial exclusion rate, especially in northern Nigeria, TAJBank said it saw an opportunity in the partnership as it will allow customers to seamlessly be onboard and benefit from the available financial services. The digital savings platform which is in form of piggy bank will have its funds warehoused with a commercial bank while all transactions are processed and secured by Paystack, a Central Bank licensed payment processing company on behalf of Saveme.ng. With a regional licence that enables the lender to cover the North East and North West regions of Nigeria and a headquarters in Abuja, TAJBank plans to raise more capital and qualify for a National License in less than two years of operation. But for now, the bank is focusing less on brick and mortar branches while investing more in Information Technology thereby reaching out to and serving its customers through robust IT tools, as it believes that is where the future of banking is headed.

TAJBank has a unique product called the Wakalah where the Bank acts as an agent on behalf of its client to execute whatever legitimate mandate the customer may give the bank. This product is unique to non-interest banks only. Furthermore, on the deposit side, it has the Mudarabah or partnership term deposit where customers place their funds with the bank while they use the deposit and share profit with customers based on a pre-agreed sharing ratio. It also has the Qard account, which is a current account relationship that attracts zero account maintenance charges. As a non-interest bank, TAJBank said it is guided by ethical principles; which include restrictions on areas it can finance. For instance, it said the bank cannot finance arms and ammunition and other areas considered harmful to society. With more players expected in Nigeria’s growing non-interest banking, coupled with increasing asset size Joda said he is confident that in the next 5 years noninterest banking assets will be within the 5-10 percent range in

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With a regional licence that enables the lender to cover the North East and North West regions of Nigeria and a headquarters in Abuja, TAJBank plans to raise more capital and qualify for a National License in less than two years of operation

Nigeria. In Malaysia, non-interest assets are almost 30percent of the banking industry. Globally, Islamic banking is growing at more than 7 percent and even European countries like the United Kingdom have embraced this model of banking owing to its benefits to society. The successful Sukuk issuances by the Federal Government also increased awareness about the sector and put Nigeria on the map. The future of the industry is very bright, according to views of industry experts. Islamic banks are moneymaking financial intermediaries much like conventional banks, but in order to meet the requirements of Islamic law (Shariah), they must adhere to four major principles. A prohibition on charging interest is the primary difference between Islamic banks and conventional banks, derived from the notion that charging interest is a form of exploitation and inherently inconsistent with Islamic values of fairness; Islamic banks are also prohibited from speculation, in the form of risky or uncertain business ventures, and from financing haram activities. Studies have also shown that Islamic banks are compelled to donate part of their profits to benefit society in the form of zakat. Islamic banking and finance have emerged in recent years as an alternative, effective and viable tool for providing financial services and development worldwide, including non-Muslim countries, as noted in findings of an industry survey. According to the World Bank, there is solid evidence that Islamic finance has become an integral part of the global financial system and has the potentials of solving the problem of poverty and low economic growth through financial inclusion especially in poor income countries. Financial inclusion through providing access to financial services according to the lender will stimulate the independence and self-development of poor households and micro-enterprises, and thus, providing easy access to finance is considered a giant step in connecting the poor section of the society to a larger and broader world. Available statistics by World Bank suggests that there has been substantial progress in increasing financial inclusion in the world for about 62 percent of adults were financially included in 2014 compared to 51 percent in 2011. Nonetheless, World Bank’s 2017 reports that about 2 billion adults were financially excluded in 2014 and 17 percent of them

were from Sub-Saharan Africa (SSA). Again, five percent of the financially excluded adults cited religious reasons or beliefs as their justification for financial exclusion and the majority of these adults are expected to be Muslims, the report read. According to the World Bank, the rate of financial exclusion due to religious reason is even higher in SSA at 6.8 percent and as such in view of this scenario, the Islamic system of Banking and finance could be very effective in enhancing financial inclusion, especially in Muslim dominated countries. “The introduction of Islamic banking and finance system in some Organisation of Islamic Cooperation (OIC) countries in SSA spurs financial inclusion in the region,” a study by the World Bank said. The percentage of financiallyexcluded people in Nigeria as of 2018 declined by 4.8 points from 41.6 percent in 2016 to 36.8 percent. Compared to other regions of Africa’s largest economy, the northern part of the country reported more unbanked people owing to high illiteracy level, the insurgency in some parts of the region coupled with high poverty rate, as compiled from an industry survey. According to the data by EFInA, millions of those who still lack access to financial services are mostly those from the North East, North Central and North West of Nigeria. While the actual journey of TAJBank started around November 2015 when Joda and his cofounder, Sherif Idi, conceived the idea of setting up a non-interest bank, the bank is now standing on its feet to contribute its quota in bridging Nigeria’s financial inclusion gap. Figures by EFInA put Nigeria’s financial inclusion rate at 63.2percent, meaning as much as 36.8 percent or 36.6 million of its population still lack access. Joda and his co-founder said they went from conceiving the idea of having a non-interest bank to capital raising, to documentation, to submission to the CBN and eventual grant of an approval-in-principle in August 2018, and subsequent grant of final licence in almost one year after with the mindset of giving access to Nigeria’s financially excluded population. “It was a very tough journey that required mental fortitude but I am glad that we have weathered the storms and today we have opened the bank for business,” said Joda, once quoted in a press statement.

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BusinessDay 24 Mar 2020  

BusinessDay 24 Mar 2020