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Suspension of new power reflective tariff may last till year-end T
US halts crowning of Okonjo-Iweala as WTO director-general
Public anger arising from government’s poor handling of #EndSARS will work against imposition of new tariff – stakeholders
ISAAC ANYAOGU & HARRISON EDEH, Abuja ome officials in Nigeria’s power distribution companies (DisCos) say the suspension of the Service Reflective Tariff (SRT) plan could be extended till the end of the year. This comes as the Nigerian Electricity Regulatory Commission (NERC) on Wednesday said it would soon issue an order
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regarding the status of the suspended SRT plan over agitations by labour unions. “There are no updates on the service reflective tariff for now. However, a new NERC order is currently underway and would be made public before the week runs out,” Sam Ekeh, a senior media officer at the NERC, told BusinessDay. But some stakeholders say public anger arising from gov-
ernment’s poor handling of EndSARS will work against imposition of new tariff any time soon. Recall, the Federal Government and the Nigerian Labour Congress had in the last three weeks agreed to suspend the Service Reflective Tariff following a threat to shut down the nation by labour unions. The SRT took effect on September 1 and is anchored on the principle of equity demand-
ing that DisCos bill consumers based on the level of service delivered. The DisCos have always pushed for a tariff that is costreflective, and the tariff structure called for improved service and analysts believe it would relieve some financial challenges in the electricity market. However, NERC issued an order suspending the SRT from Continues on page 31
he World Trade Organisation (WTO) has delayed the announcement of Nigeria’s Ngozi Okonjo-Iweala as its new director-general after the United States raised concern about her election on a consensus basis after receiving support of about two thirds of voting member nations. In response, the General Counsel of the WTO has postContinues on page 31
Inside
MTN Nigeria’s revenue jumps 13.9% in 9M’20 on data P. 30
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For leaders only: Gut or intuition Leadership Shepherd with Babs
Babs OlugbemI
I
want to thank one of the readers of this column, Titilayo Sulaimon from London who gave me a detailed expository on poor parenting as the foundation for the lousy behaviour of some leaders in the workplace and in our society. I will write on leadership at home in one of the future editions. Another response was on my position that leaders should always reward gut. I love people who show gut. Leaders who trained more leaders start by identifying people with the gut for doing the right thing devoid of self-seeking. Bashir Mohammed, want to know the difference between gut and intuition. My answer is from leadership perspective. I see everything with the eyes of leadership; that is why I coach and train people to think, act, be and behave like leaders in their lives and engagement with business organisations. Gut is courage and fortitude. I have defined conformity as the opposite of courage. Real leaders see people who exude gut as a diamond among many because most people will instead behave in a way that conforms to expectations. I would mentor a person with gut than go for millions of people that conform to the norms for fear of criticism or losing out of favour or seen as rebels. The journey to leadership requires thinking out of the box and with the gut to make the difference. Intuition is direct perception or quick insight independent of the reasoning process. It sees things in new ways given unavailable information or unexpected scenario which make the existing reasoning process inaccurate.
In world-class organisations and learning environment, leaders exhibit intuition while subordinates show gut. It is expected that sustainable institutions have processes and procedures which are expected to be followed. Gut is the courage to push or do things within the limit of the established framework without the authority to change the laid down process or procedure. Intuition, on the other hand, is the ability of decision makers to use the power and the position of office to do things to correct the flaws within an established process or procedure. In summary, gut is shown by people with no status or power to invoke change while intuition, on the other hand, is for people with the authority to make changes. Gut is more commonly than intuition. Let me fortify my explanation with the story of Adetayo, one of the most cerebral personalities I know. Daniel Adetayo was an assistant manager in one of the banks. He is knowledgeable with relevant professional qualifications but restless and unsatisfied with his career progression. He took the lane less travelled by opting to join a federal university teaching hospital as the chief accountant. He changed his employment for an offer with a 60 percent reduction in his annual salary. His thinking was to be in a leadership position with influence and power to guide people better than the opportunity at the bank and rise to the position of director of finance in the teaching hospital. Four months after his resumption at the teaching hospital, Daniel is out looking for a return to the banking industry. Aside the financial loss, he couldn’t cope with the environment where things are done with less regard to the ethics of his profession. He was made the chief accountant as promised but not the number one person in the department. The previous chief accountant who was indicted and suspended for fraudulent dealings lobbied and was recalled back as the head of the department. Daniel was left wondering how to make the changes
he planned with a leader who has the penchant for fraud. He attended interviews with two banks. At one of the banks, the head of the audit, Adanma told him he would be considered if he can take the level of a banking officer considering his current salary at the federal hospital. She was following a norm that you cannot employ someone to a grade with a massive difference in salary. So, Adetayo was offered the post of a banking officer which was two levels lower than the level of an assistant manager he was four months earlier. Adanma used the current salary as the only basis to qualify Tayo’s quest to return to the banking industry. She was a leader with no intuition in the given case. Intuition would have been to consider Daniel’s last salary in his previous bank and make a judgement based on his level of experience and what he can offer as a new hire. Daniel rejected her offer on the spot. At the second interview, the bank had a long process for employing people. Adetayo met five officers of the bank during the interview including two executive directors. He was recommended for the level of an assistant manager, the same level he was four months ago and scheduled to meet the managing director of the bank. At the brief chat, the bank’s chief executive officer found him intelligent and approved the grade of a deputy manager for him. His reason was that he quit the industry just for four months to take a political appointment and possesses the relevant requirement to be a deputy manager in any bank. What the brilliant CEO did was the use of intuition to correct the flaws of the established norm that people should be employed at a lower grade when they are making a return based on their current salary without given consideration to their level of experience or perceived competence at the interview session. On the assumption that was using pay alone as the basis is the industry standard, the officers in the second bank, exude gut by recommending Tayo for the grade of an
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Leadership intuition is the use of position and power to advance gut feeling in the interest of the organisation by invoking positive changes to the existing process and procedure
Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, the Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.
How to finance safe and affordable water, sanitation and hygiene for everyone
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ince its inception, the Sanitation and Water for All (SWA) partnership has recognised the primacy of financing in catalysing progress. Since 2010, it has held four high-level meetings with finance ministers from all around the world alongside the World Bank’s Spring Meetings. These meetings have become known as the “SWA Finance Ministers’ Meeting” (FMM). They are brief opportunities (about two hours in length) to showcase why water, sanitation and hygiene are deserving of more public funds and to outline the investment opportunities for governments and private sector alike using successful case studies. As with hundreds of other meetings this year, the SWA Finance Ministers’ Meeting planned for April 2020 was cancelled. But like some wonderful Greek mythical creature, this one global meeting has sprouted into three regional meetings with Finance and Sector Ministers, giving these regular high-level meetings a new format and a new audience. The first meeting in earlyNovember is for Africa, following in two-week intervals by Latin America and the Caribbean and then Asia and the Pacific. The advantages of this new format are obvious: regional meetings engage regional organisations which to-date has been relatively silent in SWA; and it encourages participation among peer countries in a more meaningful way. Not to mention the avoidance of travel costs and carbon emissions that face-toface meetings entail. So I am personally greatly looking forward to the events and seeing the
outcomes of this new approach. Why would a Finance Minister be interested in water, sanitation and hygiene (WASH) during these tumultuous times? I can’t claim to know the inside of a Finance Ministers’ mind, but I would expect that their chief concern is how to protect their economies during the Covid-19 pandemic and how to restart their economies as the threat is diminished. Hence, if we cannot link our aim – maintaining and expanding WASH service levels – with the concern of a Minister of Finance, there will be little interest to engage with us during this very busy and challenging period. Indeed, we have much to link WASH with the concerns of a Finance Minister: first, the quality of WASH, in particular hygiene measures like hand washing, are closely bound with the trajectory of the pandemic as stated by the Centres for Disease Control and Prevention (CDC); second, having water and toilets available at home makes it easier for communities to adhere to lockdown measures for the greater good; third, the breakdown of WASH services threatens to bring further health impacts, social disruption and economic losses – the lack of WASH services was estimated to cost the world $260 billion in 2010; and fourth, a return to ‘normality’ depends on WASH services operating, in both public places and in institutions such as workplaces, schools and healthcare facilities. However, a report in 2020 from WHO and UNICEF stated that 2 in 5 schools around the world lacked basic hand washing facilities prior to COVID-19 pandemic.
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Advocacy for WASH financing is not oneoff, but a perennial activity While all these arguments for WASH are clear and supported by evidence, the policy dialogue is currently crowded by so many issues and concerns that the need for WASH has to be continually articulated at the highest levels of government and development organisations, and throughout society. Hence, making an investment case for WASH remains fundamental to receiving funding allocations from government or donors, and attention from the private sector. Other social sectors such as health and education have benefited from high level advocacy, political attention and subsequently have received greater fund allocations. Indeed, in WASH this has been achieved in some countries, with several notable examples of Heads of State putting their political reputations on the line. For example, Prime Minister Narendra Modi pledged to make India free of open defecation within 5 years and put behind it over $20 billion of government funds to achieve it. But the India case remains the exception rather than the rule. What are my expectations of these regional finance ministers’ meetings? There are three long-term outcomes that I hope this series of regional meetings will contribute to: Bring global funds to countries. We hear about billions of dollars being released by development banks or global funds such as the Green Climate Fund, which are available for WASH. This now includes funds targeted for WASH activities under the Covid-19 response, such as from the
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assistant manager in the first place and got the ratification of the CEO. When the fact says otherwise, intuition is the tool of the game-changing leaders to make impact on the system and the people. The difference between gut and intuition is that gut is the foundation for intuition. Gut is shown by people who feel the need to correct a flaw in the current pattern of reasoning but are not in the position to evoke a change. Leadership intuition is the use of position and power to advance gut feeling in the interest of the organisation by invoking positive changes to the existing process and procedure. A classic example of the combination of leadership gut and intuition was the creation of new thirty-seven Local Council Development Areas (LCDA) by Asiwaju Bola Ahmed Tinubu in 2003. There were twenty recognised local governments in Lagos state before the creation of the new LCDAs for active development and administration using the same resources given to the existing twenty local governments. The decision which led to the withholding of the state’s revenue allocation and the associated pains prompted the thinking behind the drive for the increase in the Internally Generated Revenue of the state. Lagos as a state is benefitting from the gut and intuition of one of the former governors who laid the foundation for others to thrive. Conclusively, the essence of leadership intuition is to benefit the system, not the leaders. In a system where leaders benefit and the followers do not, showing gut is an assault on leadership. The leaders who never want to forfeit what they are benefitting will resist any gut leading to changes that could affect their privileges. Intuition is, therefore, a leadership tool for correcting what is out-dated in the system for the benefit of the people.
World. However, despite the very urgent need, these funds are often very slow to arrive and are insufficient for the global needs to meet the global WASH targets. WASH must be (seen as) investible. We need to be better at identifying the investment opportunities in water, sanitation and hygiene, including attracting private sector finance. Whether it is a financial return on investment, a return on health, a return on wo men or a return on children, we need to be in the right places with the right messages to make sure that our advocacy efforts are impactful. For example, a recent SWA call to action for world leaders urges them to recognise the vital role of WASH in controlling the COVID-19 pandemic. Also, there is no shortage of options for bringing in the private sector through different finance arrangements – where in essence public funding leverages much larger financial volumes from the private sector – butte success will depend on the underlying sector governance, such as regulations, transparent bidding processes and trust in the law – all of which give investors the confidence to invest. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Hutton, Senior Adviser for water, sanitation and hygiene, UNICEF
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A nation in turmoil, a president who doesn’t speak often & giving the monkey a cup of water!
ik MUO
I
do think we have ever witnessed this level of nationwide carnage before. Some of the madness was spontaneous, some were targeted and focused, most were senseless and some are even laughable, like those who looted tractors in one of the states up-North! Even the destruction wrought by the Biafran war did not equate to what we have just witnessed and are still witnessing. Biafra’s destruction was massive but it was not national; it was a case of the whole against one small part. In fact, some parts of Nigeria did not even know that there was war during that period. What we have now is an uncoordinated war of all against all and a steady descent into ochlocracy (mobocracy). And if urgent and coordinated care is not taken, we will be on our way to Sudan. However, everybody who has been witness to the events of the past 4 weeks knows that it did not start like this and it has not always been like this. A group of young, educated, passionate, energetic and patriotic Nigerians, most of them professionals, got tired of the prevailing ‘e go better’ and ‘God-dey’ paradigm. They got tired of the criminal highhandedness of the SARS police unit, which abandoned their core mandate of armed robbery and kidnapping to concentrate on phones, laptops and new-age fashion (tattered jeans, jaga-jaga hair et al). In a too-weird-to-believe impunity, they went to the extent of using POS and bank transfers to collect self-determined fines from the youth. That was in addition to killing and maiming at will. The End-SARS Movement was
everything that Nigerians yearned for. They digitally mobilised a huge and intimidating crowd of ‘believers’ They were peaceful, the marshalled their demands clearly and pointedly; they coordinated and administered the movement effectively and efficiently; they fed themselves, cleared the environment, provided infrastructure, including phone-charging points, showed kindness to our unfortunate brethren, and extended goodwill to their traducers (police men in particular). Of course, a critical analysis of their demands shows that SARS was a metaphor in that it covered all that was wrong with Nigeria. Initially, all was going well. However, some of us who are the authors and finishers of thuggery assets and resources ( just as we have military assets), did not understand how these young boys and girls would just emerge from nowhere and paint them in bad colours and bring the nation( and their opulent lives) to a standstill. They empowered and sponsored their idle political thugs to infiltrate attack and disorganise the End-SARS groups. We saw some of the thugs alighting from and boarding security-like vehicles and hobnobbing with men in black suites. Initially, the protesters repelled them with the private security operatives and dogs. Then one “unknown civilian” Yunusa Yusuf emerged from nowhere, addressed a world press conference, and threatened the protesters with a 48 hour ultimatum. It was ‘opendential’, and in the presence of our entire Grade A media houses. Yet, nobody asked him ‘who are you; where are you from; who sent you?’ To the best of my knowledge, nobody arrested him and nobody questioned him. And true to his threats, 48 hours later, the Abuja Car market was razed. By that time, people in authority had started threatening the protesters. The army itself announced the onset of operation Crocodile Smile (ever seen a smiling crocodile?), saying it was a routine exercise. On 20/10/20, it happened. The Lagos State Government, in an attempt to manage the increasingly tense security situation, declared a 24-hour curfew, starting from 4pm. He later extended
the operative time to 10pm. However, by 7.20pm, some overzealous unknown soldiers invaded what Olu Philips of Channels had dubbed the Lekki Convocation Ground, shot people who were sitting down, singing Nigerian national anthem and waving National flags. Sadly, in the month of October, as Nigeria was and is celebrating its Diamond Jubilee, our flag was soaked in blood of our youths! Despite all concerted efforts to deny the obvious as supported by pictures, live reports, videos, the Lekki bloodbath appeared to be premeditated. Some people removed what looked like the CCTV cameras there, the light went off and those who attacked were in army uniforms. Femi Falana has even declared that he has evidence where the soldiers took off from. However, the defence spokesman says all these pictures and videos were photo shopped while the NBC appears to have agreed with him by imposing fines of N3m apiece on Arise, Channels and AIT for relying on ‘fake videos’ for their report of the Lekki-massacre. It might not be a massacre but shots were fired, people were wounded and people died, even by the account of our hardworking but stress-out Governor. The nation gradually went into turmoil. Police stations, prisons, public buildings, media houses were burnt and looted. Policemen were attacked and some murdered. Initially, it was a southern affair, as the North appeared calm and immune from the madness. The mob was amassing and the security system appeared paralysed and the orderly End-SARS movement has been overtaken by angry, hungry, bitter and bloodthirsty mobs. In all this, our dear president did not deem it fit to address the people. Even when the Senate passed a resolution, asking him to address the people, he did not give a damn, because according Ita Enang, one of his numerous SSAs, PMB does not speak much even though he was on top of the situation. When Coro started its war against humanity with unimaginable death, tears, sorrow and unapparelled disruption. we were also informed, then by Femi Adesina, that
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In all this, our dear president did not deem it fit to address the people. Even when the Senate passed a resolution, asking him to address the people, he did not give a damn, because according Ita Enang, one of his numerous SSAs, PMB does not speak much even though he was on top of the situation
Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye
How water and sanitation systems are vital for our economies
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ipes are conduits for water and sanitation. They run everywhere make a complex system work effectively and, if you’re fortunate enough to have access, it can be easy to take them for granted. They become almost invisible -, up until they stop working when their importance becomes all too clear. Beyond their role in providing essential functions such as drinking, cooking, washing and going to the toilet, do people think about the ripple effect of water, sanitation and hygiene on other parts of our lives? And from decisionmakers, do we witness a level of policy prioritisation and investment commensurate with water and sanitation’s critical importance? The answer, in far too many parts of the world, is a resounding no. As an international community, we are too often blind to the huge costs in failing to serve so many people with the most basic but crucial of services. Investment in water, sanitation and hygiene: a missed opportunity Today, there are still 2.2 billion people without safe drinking water and 4.2 billion without a safe place to go the toilet. Reaching all of these people with sustainable services will take much more than physical infrastructure. Even where this infrastructure is already being improved, the systems and resourcing to expand them to everyone and keep them running are frequently insufficient. Investments need to grow — by three times, to an annual $114 billion, according to the World Bank’s estimate — to meet the scale of
the challenge. However, this is not a plea for charity; this is a wake-up call. The current global water and sanitation crisis is a story of colossal, rapidly increasing, unmet demand leading to colossal, rapidly increasing costs. Meeting Sustainable Development Goal 6 – water and sanitation for all by 2030 – is not a burden; it is a massive opportunity. To find concrete solutions to the financing gap, the partnership Sanitation and Water for All – a global platform for achieving the water, sanitation and hygiene-related targets of the SDGs is organising three Regional Finance Ministers’ Meeting in November and December. There we will focus on the fact that expanding water and sanitation services by strengthening the systems that deliver them is the bedrock of economic growth and sustainable development. Benefits include an overall estimated gain of 1.5 percent of global gross domestic product and a $4.3 return for every dollar invested in WASH services due to reduced health care costs and increased productivity – that’s a rate of return that any investor would wish for. The cost of not investing We also take into consideration the impact of not investing. For instance, affordable, reliable, easily accessible water and sanitation services prevent thousands of children dying every year from preventable diseases such as diarrhoea and cholera. Healthier children absorb nutrients properly, develop stronger brains and bodies, get better school results and end up making a fuller contribution to society. And we have seen all too recently how quickly
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Catarina de Albuquerque
a pandemic like COVID-19 can spread when people are not able to wash their hands with water and soap. Girls and women are relieved of timeconsuming, back-breaking water fetching and are protected from the indignity and danger of going to the toilet in insecure facilities or in the fields and streets. Water and sanitation services in schools and workplaces ensure girls and women can manage personal hygiene and not miss out on education or income. Disease burden is reduced and epidemic risk from diseases such as the coronavirus, and fast-moving killers such as cholera are slowed. Water, sanitation and hand hygiene in healthcare facilities is essential for protecting healthcare workers, patients and new-borns against the spread of infections. The workforce is more productive. The bottom line is that economic growth rests on improving educational achievement and public health — two things that are impossible without water, sanitation and hygiene. The role of finance decision-makers None of this is news. Since the early days of the industrial revolution, we have known the transformative economic and social benefits of access to water, sanitation and hygiene, and the horrific consequences of inaction. If finance ministers fail to help prioritise water and sanitation, the consequences could affect societies for generations. Financial decision-makers must create an enabling environment through investing in institutions and people. And they must mobilise new sources of
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it was not in his style to address people every day, reminding us of his stylistics lecturer who taught him that style was idiosyncratic. Of course, these are all key features of his body language strategy. Eventually, he addressed us apparently, reluctantly, on 22/10/20. There was no empathy, there were no assurances and outlines for actions, he didn’t calm frayed nerves and he told the youths in coded language: try it again! He did not even mention the Lekki bloody affair, which had caused local and global outrage concern. But he had time to boast of his landmark achievements, including tradermoni and other such integrity-challenged programmes. And as Shehu Sani captured it succinctly, we asked for a speech, we had the speech and we became sad. It was a speech that he should not have made. Our people say that onye ajulu ahu, anahu aju onwe ya (don’t belittle you because others have belittled you. Ignore them and move on with your life). We asked for it by begging him to address us Our people say that it is easy to give water to the monkey but it is usually very difficult to retrieve the cup from it. The thugs were busy doing their own little things in their own little corners. Some people consciously invited them into a business they were not initially interested in. They moved in, saw that it was sweet and they overwhelmed everybody, including their sponsors. A layer had stated that the hoodlums who burnt that Abuja Car-Mart were mobilised with N1500 apiece to torch the car mart. An ex-DSS Director informed us that a senators aids conveyed thugs in SUVs to attack EndSARS protestors. So, they gave water to the monkeys but could not retrieve the cup from them. They invited the mobs but could not recall the thugs and that was why the arson, looting and carnage got out of hand. The level of wanton destruction was such that Jesus Wept. Lagos has made a rough estimate of N1trn to rebuild what was lost. That does not include the losses of private individuals and businesses. I also wept.
finance – whether from taxes, tariffs, transfers, or repayable finance. Many countries are already implementing some of these measurements and seeing the immediate advantages. In 2014, Mali committed to move towards allocating at least 0.2 percent of GDP to hygiene and sanitation, and 5 percent of the national budget for water and sanitation. Kenya has had great results using shadow credit ratings for utilities to attract domestic and international finance. Rwanda created a public-private partnership to increase private sector participation in water and sanitation and front load investments to make sure services are available sooner. In the end, well-resourced, well-run water and sanitation systems are catalysts for progress in every sector – from gender, food and education, to health, industry and the environment. By nature of their work, Finance Ministers must use evidence to make smart decisions that help their counties flourish. In the case of water, sanitation and hygiene, the evidence is clear: continuing to neglect these services will only continue to stunt the growth of our economies, populations and societies. Now is the time to make the logical choice to invest in water and sanitation solutions that have the best return on investment – healthy families and a clean environment. Catarina de Albuquerque is the Chief Executive Officer, Sanitation and Water for All partnership
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The massacres will eventually go round CHRISTOPHER AKOR
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here is currently an attempt by paid government hacks, fanatical supporters and ethnic/religious affiliates of the Buhari administration to minimise, obfuscate, and even deny the Lekki massacre by a unit of the Nigerian military on October 20, 2020 even though the massacre was captured live on social media and by both local and international journalists. This is not new. Due to Nigeria’s often fractured, ethnic and religious politics, and the unvarnished love of lucre, some people will lend themselves to any campaign – even to the extent of defending genocide – to protect the government in power or demonstrate their loyalty. But they need not worry. The massacres will get to them too sooner or later. Lt. Gen Victor Malu, Nigeria’s Chief of Army (1999 – 2001) learnt this the hard way. On November 4, 1999, a militant group in Odi, an Ijaw village in Bayelsa fighting for resource control,
was said to have killed seven policemen. A few days later, another five policemen were killed. At the behest of President Obasanjo, Malu ordered troops into Odi November 20, not to arrest the killers of the policemen, but raze the town and massacre its inhabitants as reprisal. The soldiers demolished every single building in the town, barring the bank, the Anglican church and the only clinic in the town. Hundreds of unarmed civilians were massacred. Malu retired from the army in April 2001. Barely six month after, it was the turn of his community to taste the bitter dose he unleashed on Odi. The government sent a contingent of soldiers to mediate between the Tivs and Jukun who were almost perpetually at each other’s throat and Tiv militias mistook the soldiers for Jukun militias and killed 19 of them. Expectedly, the army’s reprisal was in form of genocide: They came in armoured vehicles and tanks, gathered the villagers for a peace meeting, separated the men, ordered women and children to leave the vicinity and opened fire on the naive men. To erase evidence, the army set ablaze the bodies of some of the victims. They also went round other villages –Vasae, Anyiin Iorja, Ugba, Sankera and Zaki – Biam killing and burning houses and any structure they could see. By the time the army was done, thousands had died and some of the villages had been completely destroyed. The genocidal soldiers didn’t even spear their former Chief. Malu’s house in the village was destroyed and three of his relatives were among those killed.
A thoroughly distraught Malu spoke to The New York Times the next day from his Lagos home asking a question he should have asked himself when he ordered the invasion of Odi: ‘How can you kill innocent civilians, farmers carrying yam on their heads? Can you mistake a yam tuber for a missile?’ A heartless Obasanjo even appeared on national television to justify the massacre as an act of self-defence by the soldiers. Malu was completely broken and he never recovered from the shock until his death in 2017. Nigeria’s power bases are so diverse and diffused along ethnic and regional lines that no one ethnic/regional group can control political power for long. The most peaceful arrangement the political class therefore made to avoid conflict was rotation of power. Buhari will not remain president beyond 2023. Power will shift to another region. And, of course, the new president will use his awesome and unchecked powers to unleash the military too on other sections of the country. Nigeria will eventually get to us all. Luckily, any Nigerian president will have at his command the services of a genocidal and cowardly army whose only winnable wars are against unarmed and defenceless civilians. When has the army won a battle against armed opponents? That was how they kept massacring peaceful agitators for resource control in the Niger Delta until the youth of the rejoin got the gist and took up arms. The army couldn’t stop the insurgents from severely crippling Nigeria’s oil production and supply and the state was forced to enter into a
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Those cheering and excusing the army need not worry. As someone crudely describes the country, he said “Nigeria is turn by turn limited”. Their time will come and then they will understand
The Unending theatrics of Nigeria’s Electricity Tariff Structure
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igeria’s electricity sector is at a precipice, and the outcome of negotiations on a new electricity tariff structure is key to determining its future. However, lack of proper coordination and leadership on the part of the government and key institutions in the Nigeria Electricity Supply Industry (NESI), and poor engagement with each other and other stakeholders are impeding factors. These have negative impacts on achieving Nigeria electricity sector transformation and an effective and viable regional West African Power Poll (WAPP). Earlier this June, the World Bank approved a $750 million loan facility for Power Sector Recovery Operation and a month later, the Federal Government approved $24 million as part of its 15 percent counterpart funding for the $2 billion Siemens Nigeria Electrification Project (NEP) under the Presidential Power Initiative. One thing was definitely going to happen after these financial commitments - an upward review of the electricity tariff to reflect current generation, transmission and distribution realities which haven’t been reviewed in the last 5 years. At least in principle, the increase in tariff would help rescue the NESI from financial insolvency, reduce government’s electricity subsidy which stands at $4.72 million daily, and guarantee the viability of the World Bank and Siemens projects. If a cost reflective tariff will ever be negotiated successfully, effective revenue collection will continue to be a challenge as a result of incorrect billing and theft.
This year alone, as with previous years, the take-off of a cost-effective tariff for the NESI has suffered three setbacks. The first was on March 31 when the regulator – Nigerian Electricity Regulatory Commission (NERC) postponed the April 1 take-off to July 1. The second was on June 29 when the National Assembly postponed the July 1 take off and suggested 1st quarter of 2021 as take-off. This was after it had earlier on May 20, criticized the reforms of the electricity sector and demanded that the Executive postpone implementation of the cost-reflective tariff. Just before the intervention of the Legislature on June 29, an incident took place exemplifying the lack of government leadership and coordination between key stakeholders and government in solving NESI challenges. On June 28, the Association of Nigerian Electricity Distributors (ANED) had issued a statement to express its displeasure about an earlier directive received from the regulator that warned the electricity distribution companies (DISCOS) against mentioning the federal government and the regulator in any communication to their customers regarding the new cost-effective tariff that was to take effect on July 1. While NERC approved the new tariff structure, it dissociated itself from the responsibility of communicating the new tariff structure to consumers, which may have been for fear of being requited by consumer associations, organized labour and the general public. As smart as NERC might have thought its action to be, it reflects negatively on it
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Okafor Akachukwu
and the government as shying away from their responsibility in ensuring that NESI is steered out of its current crisis. NERC may also have forgotten that the federal government owns 40 percent equity in the DISCOS and has been solely responsible for negotiating several NESI interventions including the Siemens deal that has necessitated the tariff increase without the knowledge and involvement of the DISCOS and other stakeholders. Another instance was the unclear outcome of the meeting that the National Assembly’s leadership had with President Buhari and his Vice on June 30 for the postponement of the July 1 cost-effective tariff. At the end of the meeting, the leaders of the National Assembly while briefing newsmen, emphasized that the meeting was for the Legislative and Executive to have an aligned policy direction especially for important policy issues, and expressed their conviction that Executive listened and agreed with them on the need for a postponement. Only 7 weeks after their meeting, the President approved a new tariff structure that took effect on September 1 which the regulator referred to as a service-based tariff that classified consumers based on the minimum number of hours of electricity supplied daily. Almost 28 days into the service-based tariff which was already facing challenges, specifically with calculating the number of hours, time of service and service interruptions that occur daily in order to accurately charge customers, the federal government again suspended the new tariff structure due to pressure from organized labour.
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multi-billion dollar settlement with the armed groups. The army has also been helpless against a rag tag army of Boko Haram insurgents who have determinedly challenged the legitimacy of the Nigerian state now for upwards of ten years. So far, the army has only been able to technically defeat Boko Haram while the casualty figure in its ranks have continued to rise daily to the extent that the army and the government no longer acknowledge or report the casualties. Unable to successfully confront armed groups, the army is always desperate to boost its sagging morale by being squared against unarmed civilians. What is more, Nigerians are never in agreement that its army is a professional genocidal army with a rich repertoire of war crimes/crimes against humanity. We find a way to excuse the behaviour of the army and blame the victims. We blamed the people of Odi for killing policemen; we blamed the Tivs for killing soldiers; we blamed the Shiites in Zaria for blocking the path of Chief of Army Staff; we blamed the people of Gbaramatu kingdom for harbouring Tompolo; we blamed IPOB agitators for wanting to break up the country. And now some are trying to blame the youth for protesting at the Lekki toll gate. Those cheering and excusing the army need not worry. As someone crudely describes the country, he said “Nigeria is turn by turn limited”. Their time will come and then they will understand. After all, their alter ego – Buhari, before he became president, was also railing against the army for killing Boko Haram insurgents in Borno.
To meet the demands of organized labour, the federal government constituted a technical committee comprising of different ministries, departments, agencies and organized labour. I would have thought that the federal government would constitute a joint technical committee which includes the legislature in particular, if the committee’s recommendations/resolutions will endure. I wouldn’t be surprised if at some stage in the resolution of the tariff crisis, the legislature demands an overhaul of the entire process or refuses to approve funding for further NESI reforms. The Nigerian government needs to learn to be more open and inclusive with stakeholder engagement if it ever hopes to start solving many of Nigeria’s socioeconomic challenges. Okafor is a Science Policy Research Unit (SPRU), University of Sussex trained energy, environment, climate change and sustainability expert and Principal Partner, Change Partners International. aka@ changepartnersintl.com.
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BUSINESS DAY
Thursday 29 October 2020
Editorial Publisher/Editor-in-chief
Frank Aigbogun
ASUU and the sustainability of public universities in Nigeria
Education is key to gainful development and thoughtful nations invest immensely in it
editor Patrick Atuanya DEPUTY EDITORS John Osadolor, Abuja Lolade Akinmurele NEWS EDITOR Osa Victor Obayagbona NEWS EDITOR (Online) Chuks Oluigbo MANAGING DIRECTOR Dr. Ogho Okiti EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha ADVERT MANAGER Ijeoma Ude MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai COPY SALES MANAGER Florence Kadiri DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)
Bashir Ibrahim Hassan
GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu
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n Monday, 12th October, 2020, educational institutions in Nigeria (basic and tertiary) opened for academic activities after seven months closure due to COVID-19. Regrettably, federal universities failed to reopen, no thanks to on-going 27 weeks old strike action embarked by the Academic Staff Union of Universities (ASUU). The strike has crippled all academic and non- academic activities. It is not the first time and may not be the last going by the nature of the government not to keep to promises. But the humongous damage strikes due to our educational system cannot be quantified. Irrespective of the angle it is viewed, ASUU’s demands must be addressed once and for all. The sustainability of public universities in Nigeria forms the basis of ASUU’s struggle which many misunderstand. ASUU is asking the federal government to improve facilities on the campuses, improve student’s welfare, revitalise the universities as agreed with the government years back and rescind decisions over the use of IPPIS payment platform and pay the backlog of earned allowances spanning over seven years. Regrettably, one major language government understands is strike. Truth is ASUU strikes have been
yielding good results one of which is the establishment of TETFUND but more needs to be done to keep pace with global realities in the sector. Agreed, students experience unnecessary delays whenever ASUU proceeds on strike. But the lecturers themselves also pay the price which includes subjecting them, their families and dependents to various degrees of torture, pain and discomfort including non-payment of salaries and allowances. The fact that the education sector is experiencing this level of hitch should unsettle any responsible government. A visit to many of the public basic and tertiary institutions in Nigeria, reveals sordid tales of decayed infrastructure and absence of teaching tools. In some; students’ seat on the floor and balconies to take lectures; no blackboards. Hostels and buildings are in dilapidated forms. Toilet facilities, well equipped libraries and functional laboratories are non- existent. The result is that many students who left such schools were seriously deficient in most subjects. Some couldn’t even read and write properly, which wasn’t the fault of the teachers but the inability to teach the young mind without the requisite teaching tools. The situation has not only affected the quality of education in Nigeria, it has also worsened the plight of public schools as people preferred the packaging of private schools to the quality
learning obtainable in public educational institutions. Worst still, those who are in the position of restoring our public schools, namely, government officials, either send their children abroad to study or delved into establishing their own private schools for business purposes. It is this ugly development that ASUU is trying to change. If only the Nigeria Union of Teachers had joined hands with ASUU, it would have been a different scenario. The least point of the current struggle is the federal government’s insistence that academic staff of federal universities enrol in the Integrated Payroll and Personnel Information System (IPPIS) which according to the government would promote transparency and accountability. With corruption as one of our major undoing as a nation, anything that will promote accountability and transparency is welcomed. However, more important is the workability of the IPPIS in the tertiary education system in Nigeria. Many have accused ASUU of being corrupt, having members do more than one job and many others as the reason for the rejection of IPPIS. But it is important we understand that the universities have a different mode of operation compared to what is operational in the civil service. In ASUU’s opinion, IPPIS is not designed to accommodate such things as remuneration of lecturers on sabbatical, external examiners and assessors and
earned academic allowances. Hence, forcing IPPIS will mean that the idea behind seasoned academia going on sabbatical to other federal universities is jettisoned. The reason for external examination and assessment which is to uphold the integrity of the University system by attracting experts in certain fields either within or outside the country to assess our lecturers or examine our students with the introduction of IPPIS also will be frustrated and will impact negatively on the ranking of Nigerian universities. In addition, IPPIS does not recognise the retirement age of Academics. All of these make IPPIS a bad idea to the University system. It is on this premise that ASUU tasked itself to develop the UTAS (University Transparency and Accountability Solution) to make up for the inadequacy of the IPPIS to the Academic sector. One will expect that as partners in progress, the Government should rather be looking at ways to adopt the UTAS for Academic staff since ASUU not only noted the challenge with IPPIS but has come up with a solution. Forcing ASUU at this point to join the IPPIS suggests that rather than promoting accountability and transparency in the University system IPPIS may be out to achieve a hidden agenda. The fact remains that education is a sure tool for gainful development and nations that understand this invest immensely in their education system.
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Thursday 29 October 2020
BUSINESS DAY
Research&INSIGHT A WEEKLY PUBLICATION OF BUSINESSDAY RESEARCH & INTELLIGENCE UNIT(BRIU)
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Salient issues in gender inequality board composition Board composition of the top 100 listed companies on the Nigeria Stock Exchange (NSE) show that 84 per cent and 16 per cent of females made up their board composition for the period ended 2019, according to data extracted by BusinessDay Research and Intelligence Unit (BRIU) from each company’s financial statement. Albeit, the corporate governance is all about bringing in the best personalities with varied experience and skills, but the gap that characterized the top 100 listed companies shows a huge gender gap.
ISAAC ESOWE
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he issue of gender inequality has been extraordinarily diverse and widespread. It can be said to be as old as the existence of mankind. The gap between women and men is obvious in every imaginable way, and thus bridging this gap is a necessary foundation for a peaceful, prosperous and sustainable world. To examine the cause of gender inequality some questions need to be answered which are not limited to – what is gender inequality, what causes inequality between women and men. How does it arise? Why does it take different forms? Why does it vary in degree across societies? What are the components that add up to gender inequality? How do various institutions and practices contribute to it, and how does it change? The whole idea of gender inequality is the idea that men and women are not equal and that gender affects an individual’s living experience. These differences arise from distinctions in biology, psychology, and cultural norms. Some of these types of distinctions are empirically grounded while others appear to be socially built. The issue of gender inequality that characterized the world at large is caused, especially, through norms and stereotypes. This, however, in turn, reinforces gender identities and coerces the behaviours of women and men in ways that lead to variation. In Nigeria, as in many other societies, gender rela-
tionships are changing and inequalities between men and women are questioned in virtually every sphere – at work, in the home, and public affairs. Yet the cold, hard facts show that gender gaps and inequalities persist, even in the face of remarkable social and economic transformations and strenuous movements to challenge women’s subordination. Labour force participation rate Labour force participation rate by sex (% of population ages 15+), that is, the proportion of the population ages 15 and older that is economically active: all people who supply labour for the production of goods and services during a specified period, which is categorized into low income, middle income and high-income groups, females in all
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these categories scored below the male counterpart aside from the low-income group where the percentage of male in that category account for 77 per cent and female 58 per cent; high income; (female 53 per cent; male 68 per cent) middle income; ( female 45 per cent; male 75 per cent ), according to World Bank 2019 Gender Data. Disaggregated data shows that in 2010, the number of women employed in the agricultural sector stood at 42.8 per cent which fell drastically to 23.8 per cent in 2019, representing a 44 per cent decline. Access to Education The recent Nigeria’s employment and education statistics for the period ended 2018 reveals gaps between the male and female genders, with females mostly at a disadvantage. For instance, 35 per cent
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of women aged 15-49 have no form of education, as against 22 per cent of the men. Similarly, most employed women earn less than their husbands do. Within the age category of 15-48, 65 per cent of women have jobs as against 86 per cent of men. From 2013 to 2018, the rate of women without formal education reduced from 42 per cent in 2013 to 35 per cent in 2018. The median number of years of schooling completed has increased from 5.0 to 6.5 years during the same period. However, among men of ages 15-49, the median number of years of schooling increased from 6.6 to 10.5 years. This shows the gap in school completion rates between males and females has widened from 1.6 per cent in 2013 to 4 per cent in 2018. Women in companies
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How to bridge the gender gap Insights from Dataphyte advocacy document titled Gender in Nigeria 2020 show that a typical woman and girl child in Nigeria still lacks equal opportunity for personal development as men and boys do. This discrimination incapacitates the girl child and indeed every female from competing for scarce opportunities under the already austere societal conditions. This comes with a grave impact on their health, welfare and capacity for selfhelp. Hindering women’s access to more rewarding vocations clearly or subtly does not only limit human resource potential but discounts overall economic growth and national development. The only feasible way to create gender balance is expanding women’s rights, freedoms, desire to get education and work. The resultant effect of this is the perfect cooperation of labour opportunities and harmony in the society as well.
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Thursday 29, October 2020
BUSINESS DAY
COMPANIES&MARKETS #EndSARS: Nigerian banks intensify rebuilding efforts after counting losses to vandals MICHAEL ANI & Favour Olarewaju
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igerian banks are intensifying building efforts to return to full operations, after suffering major loss from increased tension and restiveness across the country. The country’s financial lenders, were among businesses that were most hit, in terms of destruction of properties after hoodlums hijacked the #EndSARS peaceful protest, and resorted into looting and destroying both private and public properties, forcing the government across the country to enact a temporary shut down of economic activities. However, as economic and business activities gradually returned to normal, Monday,
following the relaxation of the curfew by various state governments, business across counted various property damage with many of them filing for huge insurance claims. Nigerian lenders including GTB, First Bank, UBA, Fidelity, FCMB, Wema Bank, Sterling and Union Bank, were some
of the lenders affected by the uprising, according to a report from local media house, Arise TV, which monitored the situation across the country. Tier 1 lender, First Bank, had 10 of its branches across various parts of the country, affected by the #EndSARS violence.
Union Bank also had 10 of its branches affected, GT Bank (9), Access Bank (8), Fidelity (7), FCMB (6), Wema Bank (3), Sterling Bank (3), Zenith Bank (2) and UBA (2). According to Arise TV, while it was difficult to ascertain in monetary terms, the number of damages the banks suffered from the violence, until their insurance companies put a cost to it, most banks particularly those in Lekki, a suburb area in Lagos, had to stop operations to repair their damaged property from the incident. Irrespective, the banking index gained 1.01 percent to close 348.35 points at the close of the trading session, Monday, as investors sentiments heightened from improved 9 months performance scorecards of banks.
Flour Mills records biggest daily gain after revenue jumped 31% in H1’20/21 MICHAEL ANI & MERCY AYODELE
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hares of Flour Mills, Nigeria’s leading integrated food and agro-allie d company, jumped the most in over a year by 9.5%, after the firm released its unaudited financial statement for the first six months ended 30th September 2020, showing a 31 percent increase in revenue. The share price gained N2.30 percent in the Lagos Bourse, Tuesday, to close at N26.50k from an opening price of N24.20, according to Bloomberg data. In its financial scorecard available on the website of the Nigerian Stock Exchange (NSE), the food and agro-allied company grew revenue by 31 percent to N355.1 billion in the first six months ended 30th September 2020, from a revenue of N270.8 billion in the same period last year. The strong momentum in its aggregate revenue was driven by an increase in revenue witnessed across all four segments of the company, including food, agro allied, sugar and support services. In its food business value chain which involves flour milling, production of pasta and noodles, revenue increased by about 30 percent to N215.9 billion from N170 billion, while the Agro-Allied business value chain which involves livestock husbandry, production of livestock feeds,
...PAT increases 68% to N9.9bn
sale of fertilizer, edible oil, farming and other agroallied activities, grew revenue by 45.9 percent from N49.4 billion to N72.1 billion, the biggest revenue growth in all the four segments. The sugar business value chain which involves cultivating, processing, refining and selling of sugar, reported a revenue increase of 29.4 percent from N44.9 billion to N58.2 billion, while support business value chain which involves the manufacturing and sales of laminated woven polypropylene sacks and flexible packaging materials, operation of terminals A and B at Apapa Port, customs clearing, forwarding agents, shipping agents and logistics, haulage and real estate, saw revenue increased by 40.6 percent from N6.38 billion to N8.97 billion. “Similar to our performance over the last few quarters our business has been able to sustain the strong
performance in spite of the increasingly difficult terrain and uncertainties. Management remains optimistic that with continued efforts in sales and marketing activities geared at boosting our top line while keeping the costs under control we should be able to sustain the good performance for the remaining period,” the firm said in a statement signed by its company’s secretary, director and legal services, Omolu Joseph. Unlike other listed companies that run a January to December financial year, Flour Mills financial year starts April of every year to March hence, when other companies are in their 9month period, Flour Mills would be in its half year period. Pre-Tax Profit of the firm increased 69 percent from N8.83 billion to N14.6 billion, while PAT jumped 68.3 percent to N9.9 billion from N5.9 billion. Similarly, its earnings per share of
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Flour Mills also rose by 150 percent to N125 per share from N50 per share in the previous year. Cost of sales rose 27 percent to N305 billion from N239 billion in the period, while gross profit was up by 58 percent to N50.2 billion from N31.7 billion a year ago. The increase in profit before tax was largely driven by the ago- allied segment, which generated a profit of N6.3 billion compared to a loss the previous year. The agro-allied segment saw very strong improvement in the edible oils and fats, protein and fertilizer businesses following the investments over the years. Commenting on the result, Paul Gbededo, the group managing director/ CEO, stated that the business has once again shown its resilience by following the path of sustainable growth despite the prevailing challenges in both the local and global economy. He further assured that in line with the company’s vision to continue to grow value for investors, management will for the remaining part of the financial year continue to concentrate on improving operational effectiveness through accelerated strategies for groupwide cost optimization, which will ensure sustainability in the current market climate, while it continues to invest growing the business further
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Lafarge Africa grows profit by 3.4% in Q3 2020 Mercy Ayodele
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afarge Africa Plc, a leading Sub-Saharan Africa building Materials Company saw its profit after-tax rise by 3.4 percent to N4.86 billion in Q3 2020 from N4.7 a year ago as revenue rose. The cement company saw revenue rise by 31.4 percent to N59 billion in Q3 2020 from N45 billion in the same period last year, and N56 billion in the previous quarter. Recurring earnings before interest and taxes (EBIT) was also up 7.2 percent to N8.3 billion in Q3’2020 from N7.7 billion in Q2’2019. For 9 months ended 30th September 2020, Lafarge Africa recorded a 10.3 percent growth in revenue to N180 billion from N163 billion recorded in the same period last year. Lafarge Africa has also seen its share price rise to N17.90 as the market closed on Friday from N15.30, its opening price at the beginning of 2020. “Our robust results for the first 9 months reflect the strong recovery of the demand in Q3 and the successful implementation of
our Health, Cost & Cash initiatives,” said Khaled El Dokani, Country CEO of Lafarge Africa plc. “Both have delivered considerable improvement in recurring EBIT, net income and free cash flow, despite the impact of the COVID-19 pandemic and Naira devaluation, particularly in Q3” “We continue to prioritise the health and safety of our employees, while supporting our partners and communities”. Lafarge Africa introduced the Health, Cost and Cash cutback initiative earlier this year. This involves cutting back on CAPEX, fixed costs, and focusing on the health and safety of staff and its customers in other to bolster its cash position. During this period, the gross profit rose to NGN13.80 billion, surpassing the NGN12.14 billion it recorded in Q3 2019. Although the cost of sales rose to N45.5 billion in Q3 2020, from N33 billion recorded in Q3 2019, revenue remained unaffected. Lafarge Africa’s Profit before tax for Q3 2020 rose to N5.5 billion from N4.6 billion posted in the third quarter of the corresponding period of 2019.
Airtel appoints Kelly Rosmarin as non-executive director MICHAEL ANI
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irtel Africa plc, a leading provider of telecommunications and mobile money services, with a presence in 14 countries across Africa, Tuesday, appointed Kelly Bayer Rosmarin as a non-executive director with effect from 27 October 2020. According to Airtel, Rosmarin appointment is by the nomination of the controlling shareholder under the terms of a relationship agreement dated 17 June 2019 between the Company, Bharti Airtel, Airtel Africa Mauritius Limited, the majority shareholder and an indirect subsidiary of Bharti Airtel, and Bharti Telecom. “Bayer Rosmarin will now replace Arthur Lang who will step down as a nonexecutive director on the same date,” Airtel said in a note sent to the Nigerian Stock Exchange (NSE). Bayer Rosmarin is currently CEO of Singtel Optus and Consumer Australia and was previously with Commonwealth Bank of Australia, where she held several senior positions and varied portfolios, before being appointed as Group Executive of Institutional Banking and Markets. She is recognised for leveraging technology, data @Businessdayng
and analytics to develop leading customer services and experience and was named in the Top 10 Businesswomen in Australia and the Top 25 Women in Asia Pacific Finance and holds a variety of Board and advisory responsibilities. Also, she had since February 2019, served as an independent non-executive director on the Board of OpenPay, listed on the ASX, and will continue in that role. Openpay is a payments technology company based in Australia. Commenting on the directorate change, Chairman, Sunil Bharti Mittal said: “On behalf of the Board, I would like to thank Arthur, who joined the Board in October 2018 and supported the company through its IPO, for his significant contribution to the success of our strategy to build Airtel Africa into a market-leading mobile service provider and wish him well for the future.”
Thursday 29 October 2020
Innovation
Apps
BUSINESS DAY
Start-up
Gadgets
Ecommerce
IOTs
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TECHTALK
Broadband Infrastructure
Bank IT Security
How IoT-based asset tracking can help Nigerian businesses reduce delivery losses FRANK ELEANYA
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hile the industrial revolution is gradually picking up with manufacturing plants springing up across the country, Nigeria is still largely an import-dependent economy. In view of that, the country’s major roads host hundreds of containers carrying different goods going from either the ports or the local factories to the markets spread across the country where the consumers will buy them. On several occasions, the containers never get to their final destination, or when they do they do not deliver the exact amount of goods they are expected to deliver because someone has tampered with them. For the containers that get lost, it might take months to find them, if they ever get found. A missing container could cost manufacturers a lot in lots of time and money. The challenge is not peculiar to Nigeria container drivers alone, all over the world businesses report cases of missing containers. Aside from containers, a company’s assets pass through multiple sets
of hands both internally, among employees as well as externally, among service providers, which means the opportunity for lost or mismanaged assets is a big risk. Years ago, asset tracking involved manual procedures to enter data such as handwritten ledgers and online spreadsheets, but technology is now transforming the industry. The combination of mobile computing, analytics, and cloud services, all of which are fuelled by the internet of things (IoT), is now changing how delivery and asset management companies are conducting their operations. At the Disrupting Asset Tracking with IoT webinar, in conjunction with Connected Finland, experts shed light on the emerging world of asset tracking. To be sure, asset tracking is a process of keeping track of a company’s physical assets and their information (location, status, due dates, etc). Depending on the business, physical assets can mean different kinds of equipment, IT devices, tools, or vehicles. The term asset tracking is often used interchangeably with the term asset management. The asset tracking market is projected to worth $3.93
billion by 2023. Global delivery company DHL and tech giant Cisco estimated in 2015 that IoT technologies such as asset tracking solutions could have an impact of more than $1.9 trillion in the supply chain and logistics sector. Also, there will be 267 billion IoT asset tracking devices deployed in the global industry in 2027. The primary objective of asset tracking is to save time and money. Tracking company assets provides invaluable information about asset usage (who is using what, where, and when),
maintenance and calibration schedules, and need for new equipment. The data collected via asset tracking can be used to support decision making, prevent losses, and maximise asset utilisation rates. Being a nascent industry in Nigeria, Sigfox is one of the very few asset tracking technologies helping businesses ensure their deliveries reach the final destination. The technology which was launched recently in 2020 is being operated exclusively by IoT Africa Networks. Tranter IT, the parent
company of IoT Africa is the exclusive distributor of IoT Connected devices in Nigeria. Lare Ayoola, CEO of IoT Africa Networks says Sigfox enables you to observe your entire asset tracking network be it industrial, commercial, business, or residential in a convenient and budgetfriendly manner. “You might not be able to rely on electricity in Nigeria, but you can rely on Sigfox,” Ayoola said. “This is because the Sigfox devices can be powered without electricity. Their battery life can last for more than four years on a
L-R: Biodun Omoniyi, group managing director, VDT Communications Limited; Bimpe Olaleye, group chief executive director, commercial, ipNX, and Olusola Teniola, president, Association of Telecoms Companies of Nigeria (ATCON), at the National Dialogue on Telecom/ICT Sector conference, organised by ATCON in Abuja...recently
single charge.” IoT is expected to transform many industries including inventory, logistics, manufacturing, distribution, construction, insurance, security companies, and more. “The IoT network that Sigfox and IoT Africa provide is enabling us to track things we never could have before thanks to new technologies and smaller form factors,” Tom Lindblad, founder, Connected Finland said during the webinar. IoT connectivity is tracking assets along the supply chain and receiving alerts on anomalies such as unauthorised trailer detachments, virtually fence and manage herds, intercontinental sea-freight tracking, recovery of stolen vehicles, monitor the logistic supply chain, track industrial assets, enable real-time tracking of consumer’s luggage worldwide. For Sigfox and its partners, the major drive for IoT in Nigeria is for companies and cities to connect everything and stay in control of their assets and business operations. “Based on experience, knowledge, and technical background, we can deploy and execute projects relating to IoT in Nigeria,” Ayoola said.
$4.3m Catalyst Fund targets 6 Ghanaian companies transforming informal traders FRANK ELEANYA
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ix online commerce and innovative companies based in Ghana with solutions that enable traders in the informal medium and small enterprise sector to leverage digital technology to scale are the targets of a $4.3 million Catalyst Fund. The fund which was unveiled on Monday is managed by BFA Global, in partnership with the Mastercard Foundation and the Meltwater Entrepreneurial School of Technology (MEST). The six companies when selected will participate in
the Catalyst Fund Inclusive Digital Commerce Accelerator program which objective is to support the digitisation of MSEs in Ghana. In a statement BusinessDay received, the managers of the fund said the twoyear program will improve the livelihoods and financial resilience of MSEs in Ghana, that have been impacted by COVID-19, by enabling access to digital commerce platforms and access to the market. A survey of low and middle-income individuals conducted by BFA Global found that 44 percent of self-employed people had lost their jobs or could
not find work. The Ghana Statistical Service tracker recently found that microenterprises are faring worse than large and small enterprises; among businesses that are open, 92.2 percent of microenterprises report decreased sales (compared to 89% of small and medium enterprises, and 45% of large enterprises). Sales lso dropped to 60.9 percent compared to last April. “Through the Inclusive Digital Commerce Accelerator, we aim to impact informal MSEs in Ghana who, particularly in light of the COVID-19 crisis, lack access to a financial safety net and find their livelihoods
impacted when physical commerce suffers,” Maelis Carraro, Catalyst Fund Managing Director said. “Along with support and deep local expertise from the Mastercard Foundation and MEST, we aim to enable companies who are already tackling distinct problems in the digital commerce space to better reach informal MSEs so they can leverage digital rails to improve their financial resilience for the future.” After they are selected, the six companies will get a flexible grant capital of up to $120,000each, expert-led venture acceleration sup-
port ; portfolio meet-ups and curated cohort-based workshop sessions with local expertise and operational support by MEST; a commitment to sharing best practices, toolkits, learnings, and insights with the digital commerce sector; connections with Catalyst Fund’s growing global Circle of Investors (65+) and Circle of Corporate Innovators; and ecosystem acceleration to create a more enabling investment and business environment in which digital commerce companies can prosper. The Catalyst Fund plans to expand beyond its flagship Inclusive Fintech pro-
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gram and will launch it via a virtual event and company pitch showcase on 4 November. “ Hi s t o r i c a l l y , M E S T has focused on early-stage startup support and creation through our training program, seed fund, and incubator programs,” Greg Coussa, MEST Strategic Director said. “The Inclusive Digital Commerce Accelerator provides an opportunity to work with Catalyst Fund to support scale-stage ventures which are strategically seeking to better reach and serve informal MSEs, leveraging our local knowledge, networks, and expertise.”
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Thursday 29 October 2020
BUSINESS DAY
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Thursday 29 October 2020
BUSINESS DAY
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ENERGYREPORT Oil & Gas
Power
Renewables
Environment
Downturn in the Nigerian Petroleum Industry: Considerations for ameliorating fiscal burden Oluwatumininu Familusi
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n recent years, the global oil and gas industry has generally been characterized by price volatility. Oil prices have fallen more than sixty percent since the beginning of 2020, owing significantly to the impact of the Covid-19 pandemic and the refusal to cut global production cuts leading to an oil price war between the world’s largest producers. With the emergence of the Covid-19 pandemic, the landscape for most oil producing companies globally has been severely impacted. Demand for oil and gas products was significantly reduced owing to lockdowns imposed by governments all over the world and resulting in a significant decline in the usage of these products. Given the decline in demand, products were traded at a discount to rapidly get off takers, stay competitive and ultimately ease the pressure placed on storage facilities. As global economies began to ease the lockdown and OPEC’s agreement with other producers to cut production, the sector experienced a gradual increase in oil prices, though they are still generally at an all-time low. The Nigerian economy, which is significantly driven by revenue from oil and gas, has also been significantly impacted by the emergence of the Covid-19 pandemic. Companies operating within the
upstream sector of the industry continue to see a significant decline in their revenue base. The impact is especially seen with Nigeran Independents operating in the sector, who are also experiencing a double whamming effect resulting from a drop in crude oil price and a shortage of foreign exchange. This decrease in the purchasing power of the Naira significantly impacts the unit cost of production given the difference in exchange rate used in production and that recovered for the sale of their products. Despite falling oil prices, difficulties in navigating the landscape, and the impact of exchange shortage suffered by companies operating in this sector, they are still obligated to remit the royalties, taxes and levies imposed by the government without being
offered any form of palliative to cushion the downturn. For instance, in the Nigerian oil and gas industry, the Nigerian Independents were not considered in the government’s draft fiscal economic stimulus bill in response to the Covid-19 pandemic despite its huge contribution to the revenue earning capacity of the government. These Nigerian Independents account for about 20 percent of the total oil production in the country and are the largest supplier of domestic gas to the Nigerian economy. Further, the passage of the Finance Act, 2019 introduced changes to several tax legislations, including the Petroleum Profits Tax Act (PPTA), which provides the legal basis for the imposition of taxes on the income of companies engaged in the exploration and production of crude oil in Nigeria.
Section 24 of the Finance Act repealed the provisions of Section 60 of the PPTA that provided for the Withholding Tax (WHT) exemption on income or dividends paid out of after-tax petroleum profits. This section had always been an incentive for investment in the upstream sector of the industry, given that oil producers are already heavily taxed at 85% of their profit for Joint Venture operations and 50% for Production Sharing Contract operations. The repeal of this section, therefore, constitutes a significant tax impact on the upstream operators and ultimately a decrease in returns on investment to their shareholders. The recent amendments to the Deep Offshore and Inland Basin Production Sharing Contract Act, which effectively increases the royalty rate for deep offshore projects from as
low as 0% to as high as 17% is also a factor that significantly increases the cost of production for companies operating in this sector. For businesses, the increased costs from the fiscal amendments referenced above, and the significant decline in revenue, ultimately translates to lower profits which may significantly impact the going concern of some these independents. The Federal Government recently announced its intention to conduct bid rounds for the acquisition of Marginal fields in Nigeria which are operated by independents. These operators generally find it difficult to attract financing at a competitive interest rate and are often exposed to interest rate risk on their investment. The industry acknowledges that the decision to conduct these bids is a step in the right direction. The government is however encouraged to provide fiscal considerations for participation, and grant incentives for the sustainability of these companies. These considerations should continue to support and enhance local capacity and content within the industry. In year 2006, the Department of Petroleum Resources (DPR), in its bid to support the Marginal Field regime conveyed an amended fiscal term of Petroleum Profit Tax at the rate of 55% as against the traditional 85% and an Investment Tax Credit at 20 percent. These fiscal incentives are not
backed by any legislation. A review of some of the legislation by the government in the light of the impact of the Covid-19 pandemic on the operations of oil companies can greatly cushion the downturn being experienced by the industry. There is no doubt that the industry needs comprehensive reform and a policy direction specifically in the light of the Covid-19 pandemic impacting economies across the globe. These reforms should be aimed at ensuring the survival of the industry with specific emphasis on the need to continue to drive local content in the industry. For instance, to encourage participation in the bid process for Marginal fields, there should be intentional efforts by the government to consider a gazette into law, the tax concessions conveyed by the DPR in 2006. In all of this, the muchawaited Petroleum Industry Bill is already a solution in this regard and more than ever before, the 9th National Assembly needs to ensure that this is passed without any further delay. Stakeholders within the industry will need to converge to ensure that controversies and potential disputes that may arise from the passage of the Bill is addressed as quickly as possible. Oluwatumininu Familusi, Senior Manager, Business Tax Services, Ernst & Young Nigeria.
How transparency is aiding NNPC to march towards profitability olusola Bello
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or a long time, the impression many people have about the Nigerian National Petroleum Corporations NNPC has been that of an organisation that operates in an industry that is opaque. With it activities often kept in secrecy and it is never believed that it can make profit. But this perception is being changed with the series of reforms that have taken place with the coming of Mele Kyari at the head management of the corporation. Having undergone series of reforms which have made it to be more transparent in it activities, the attention of EITI was drawn to it, and since then, the two bodies have been partners in the corporation’s chart for profitability. Olusola Bello, Team lead,
One of the reforms that was carried out was the Transparency Accountability and Performance Excellence which has further consolidated it focus on transparency. Through this process, oil marketers now buy products online. The automation of the processes in the Pipeline and Product Marketing Company (PPMC) and NNPC retails have enable the corporation to reduce waste. The corporation through automation of it processes also was able to achieve the 2.3 million barrels daily production that the country had during the COVID19 pandemic lockdown. This has not been achieved in the last 10 years. If there is one thing transparency does to any organization apart from showcasing its honesty and integrity, it helps
Graphics: Joel Samson.
to boost its performance; it helps to put its managers on their toes to do their best knowing that there is no room to hide their inefficiencies. This f NNPC commitment to transparency appears to begin to yield positive results in the form of huge reduction in losses – from N803bn losses in 2018 to 1.7bn losses in 2019 Since the corporation began its journey in transparency with the coming of Mele Kyari at the helm of affairs in 2018. It has since then recorded a series of firsts on the transparency front. It published its 2018 Audited Financial Statement earlier in the year for everyone to see, rather than the maintaining the old style of surreptitiously submitting it to statutory agencies like the Office of the Auditor General
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of the Federation. It also got listed as an EITI-partner company thereby officially sealing its commitment to transparency. When the 2018 AFS was published, many critics came hard on the Corporation calling it a laggard among its National Oil Companies peers. They failed to see the significance of the noble act as a game-changer, a step that could launch it permanently on the path of growth. The huge cut in losses is indicative of the new era of growth for the Corporation The feat of huge loss reduction was achieved through improved performance driven mainly by cost optimization, contracts renegotiation and operational efficiency. One of the key pointers to the fact of cost optimization
in the Corporation as indicated in the 2019 AFS is the huge reduction of the General administrative expenses from N894Billion in 2018 to N696Billion showing a positive variance of 22 percent. Majority of the subsidiaries, except the refineries which have been shut down for rehabilitation, also recorded huge growth in profit: For example, Nigeria Petroleum Development Company ( NPDC) recorded N479Billion profit in 2019 compared to N179Billion in 2018 representing 167 percent increase, Integrated Data Service Limited (IDSL) recorded N23Billion profit in 2019 compared to N154Million in 2018 representing 14966 per cent increase, PPMC recorded N14.2Billion profit in 2019 compared to N9.3Billion in 2018 represent-
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ing 52% increase. Some critics have argued that the 2019 AFS shows that NNPC was still on the brink of bankruptcy as a going concern since its liabilities were still higher than asset. But they did not to take into cognizance the determination of the current NNPC Management to make a difference. That determination has been amply displayed through its commitment to transparency and accountability which in turn is reflecting in excellent performance as recorded in the huge improvement in its financial position – the huge reduction in losses. If this trajectory is followed, it is possible that 2020 will see NNPC on a solid profit path since it management has continued on the drive to reduce cost, promote efficiency, and rev up profits.
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Thursday 29 October 2020
BUSINESS DAY
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No Nation can Survive a War between its Security Agencies and its Youth - Bar Leaders Say 41 Nigerians including leading legal luminaries, Dr. Olisa Agbakoba, SAN, Funke Adekoya, SAN, and Femi Falana, SAN call for urgent intervention in the “unfolding national crisis” following the EndSars protests.
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e are responsible and patriotic Nigerians who have watched with serious concern the unfolding crisis threatening to engulf our nation. This has followed the recent protests by Nigerian youth across the country, against widespread police brutality, endemic corruption, and bad governance. We are non-partisan actors who believe in the union of our people through the maintenance of democratic order founded on the rule of law. We believe in the freedom of all Nigerians to exercise the rights guaranteed in our constitution, including freedom of speech, the right to participate in peaceful protest and in processions without harassment or intimidation from any person or authority. The developments of the last weeks culminated in a deadly attack on peaceful protestors, which from available evidence appears to be by agents of our government on 20th October 2020 present one of the most serious crisis in our nations history. At the root of these protests by our youth is bad governance and lack of accountability. Currently, 65% of Nigerians are young persons under 35 years of age. Majority do not feel that Nigeria works for them or supports their interests or aspirations. They have been victims of police brutality and extortion all their lives and collectively decided the situation was no longer acceptable. It was on that basis that they began the EndSARS protests to end police brutality and ultimately to defend their basic rights, including the fundamental right to life. From all accounts, their protests were peaceful, and disciplined. They were focused on defending the rule of law and good governance, on many occasions symbolically raising the national flag or singing the national anthem. The response of the Government to these protests has been largely slow, unconvincing, and half-hearted. By formally accepting the youth’s demand to end SARS but immediately announcing it would be replaced with SWAT, that did not demonstrate good faith. This has happened several times previously when our youth had protested police brutality and extortion. With no credible response and with no basis for trust in the willingness of their government to address their real grievances, they continued their protests. There are widespread allegations and some available evidence would appear to support this, that agents of government or other affiliated political actors sought to break the legitimate protests
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by the youth through sponsoring or promoting thugs to attack the protestors and damage properties which were then attributed to the youth protestors. Some evidence also suggests that there are attempts to delegitimise the protests by seeking to divide and rule the youth through ethnic and religious manipulation. This makes the situation very dangerous for the country. This divisive and cynical approach, if established, portends great danger to the nation and is unacceptable. A cynical and brutal response, to the protests by the government or its agencies will only succeed in taking the agency of these protests from the hands of concerned, peaceful, orderly protesters for the rule of law and delivering our streets to the hoodlums and arsonists as is currently unfolding. With over one hundred million people living in extreme poverty, Nigeria
Inauguration of Judicial Panel of Inquiry and Restitution for Victims of 19 SARS-related Abuses in Lagos State
cannot afford to tread the path of exacerbating ethnic and religious divides which can only lead to anarchy. Any response from the government agencies or indeed any group, that suggests this, must be condemned strongly. On Tuesday 20th October 2020, the nation was rudely shocked by what appears to be a premeditated violent crackdown on the protestors thereby significantly escalating the volatile situation. Earlier on that day, the Lagos State Government had declared a 24-hour curfew which would take effect from 4pm. According to reports, as the deadline was not practical, the state government extended the time for compliance to 9pm. However, before the reviewed curfew time, armed men in the uniform of the Nigerian military were deployed to the protest site at Lekki toll gate in Lagos. Available evidence suggests that they did not order the crowd to disperse and
Can Africa’s regional economic communities produce a continental market? Part 2
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they did not engage in non-lethal crowd dispersal action, but rather opened live ammunitions on the defenseless assembled youth, some of whom were reportedly killed or wounded. This attack on unarmed protesters holding the nation’s flag and singing the national anthem will go down in infamy and will be engraved in the minds of Nigerians as one of the worst abuses of its own citizenship. No Nation can survive a war between its security agencies and its youth, and it is to avert this prospect that we make this intervention and recommend the following urgent action. Having carefully observed and followed these unfolding events, and to halt our descent into further break down of law and order, we call for urgent steps to be taken by all concerned. We call on President Muhammadu Buhari to take immediate urgent steps to address the widening trust deficit
Key Provisions in Artiste Recording Contracts
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between the Government and the President on the one hand, and the Nigerian youth and its people on the other. To move forward, the President must take decisive action to close the trust deficit by: Identifying and arresting immediately the persons that gave instruction for soldiers to shoot protesting youth at the Lekki Toll Gate on 20th October 2020; Institute an urgent independent inquiry on: (i) the events at Lekki toll gate leading to the use of live ammunitions on the protestors and (ii) the apparent use of sponsored thugs or hoodlums by security operatives to infiltrate and break the peaceful protests. All those identified to be responsible for this must be held to account and prosecuted; Take immediate remedial action as spelt out in the youth Charter of Demands (which they term 5For5 Demands) including the immediate release of all arrested protestors, justice and compensation for the families of victims, and an independent body to oversee the prosecution of guilty officers; Address the Nation with concrete plan of implementation of the modalities and timelines for police reform. Respond positively to the consensus opinion that the heads of the security agencies have performed poorly and should be relieved of office; Announce urgent steps to address perennial insecurity and killings in the country particularly in the North-East and North-West; Finally, develop a clear workplan for the implementation of the governance reform programmes for which well-meaning Nigerians have been demanding. We commend our youth who have been courageous and patriotic in their demands for the protection of their rights and for a better Nigeria. We urge that all Nigerians support these demands which have been without any ethnic or religious coloration. We urge the protestors to remain law abiding and patriotic and not to engage in any intimidation or harassment of ordinary citizens or engage in any form of violence. We appeal to parties and stakeholders to work for speedy resolution of the crisis. We strongly condemn the wanton destruction of properties, killings and maiming of innocent citizens and ethnicization by rioters and hoodlums trying to ignite a religious or ethnic conflict and call on ALL Nigerians to remain calm and avoid retaliation or taking the law into their hands.
Law Reform ‘worth billions’, Economists find
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Thursday 29 October 2020
BUSINESS DAY
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RIGHTSWATCH Inauguration of Judicial Panel of Inquiry and Restitution for Victims of SARS-related Abuses in Lagos State
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he Lagos State judicial panel of Inquiry and restitution convened for the first time to discuss victims of Special anti robbery squad (SARS) related abuses & Lekki toll gate incident. On the 19th of October, Babajide Sanwo-Olu
invoked section 1 of the Tribunals of Inquiry Law of Lagos State which gives him the power to constitute a tribunal when necessary to inquire into the affairs of any public officer in Lagos State.
The 8-man Lagos Judicial Panel was led by Justice Doris Okuwobi, a retired Judge of Lagos State. The youth representatives on the panel are Rinu Oduala and Majekodunmi Temitope.
YOUNG BUSINESS LAWYER
The #EndSars Protest and the Economies of Trust OYEYEMI ADERIGBIGBE
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ome businesses watched with apathy as the crowd massed up across the streets of Lagos. The protest was a rumour, the “youth” were restive and were pushing for the end of the Special Anti-Robbery Squad (#SARS), an arm of the Nigerian Police Force which has over the years become notorious for human rights violation, brutal abuse and sadly, criminal activities. Numerous reports stated that the SARS had become a behemoth, unaccountable to no one and totally uncontrollable. Social and traditional media have for many years been replete with the atrocities allegedly committed and as the protests begun, it was clear that no horse was left without the goring of this unit. After a few days, the protest became a “nuisance” to some, traffic hotspots across the city and in certain cases, inability to commute efficiently triggered online catcalls at the unseen organisers of the protest. Shortly after, it became an awakening, a cause; many businesses irrespective of size began to share information,
make contributions and fuel the protest. There was sudden realisation that there was reason for everyone to identify with the protest. It was like a giant awakening. A clarion call at the very least. Though not the first protest in recent times, it was fast becoming the best according to reports. The organisation, the alleged robotic synchronisation across the several locations of protests and the fact that there was “no leader” made it a wonder to behold. At its peak, the protests were in 154 locations in Nigeria and in over 12 cities around the world. Nigerians in diaspora seemed to have found the long missing connection as they trooped the streets of cities still on lockdown and gathered despite caveats. It was a timely cause; it was a necessary intervention. As the numbers of the protesters increased, businesses played a significant role providing food, sourcing materials, digital assets and if you cared to name it, you would find it at a protest ground. For twelve days, the youth seemed to be up to something epic and everyday someone new, was enlisted. If you failed to enlist, you were www.businessday.ng
unpatriotic or one of “them”. The government on its part, listened to the protests, the SARS unit was disbanded, and this culminated in the informal #5for#5 pact. Then the next quest was action. The Nigerian government was said to be running the same script having disbanded SARS at least four times in the past; the people needed more. Their only security being the fact that they had taken to the streets and would only leave when the response was on their own terms. Sadly, this was not the end. With a cryptic turn of events there was an “alleged” shooting at one of the main centres of the protests and then carnage. Immense carnage stated to require remedial investment of up to N1
trillion naira for the Lagos State government while that required for affected businesses is unknown because it really cannot be quantified. In a year like 2020, featuring the complications of a global pandemic and wide civil unrest, economic slowdown and a teetering naira, one would think that we had our fair share of trouble, but the events of the last few days have shown that we are on the precipice and it is necessary to address endemic disconnects in our society to ensure that the environment created for businesses to function is at the very least, stable. One of these key elements which is missing, is trust. The people do not trust the government and so they would rather continue to protest until they sense more convincing action. This seemingly unimportant stance is the trigger of the carnage that we have witnessed in the last few days amongst many other things. The trust deficit should be of significant concern to the business community as direct victims of the carnage and unnecessary trepidation that has trailed the market because of these unfortunate events. This is an even more urgent need as the world continues
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to transition to a fused trust economy. Most of the new age businesses, involve an exchange of value which is premised on the foundation of trust. This demand for trust is not limited to the promoters of the business, but the accreditation of the business environment in which they are domiciled. Nigeria has in the past few years made attempts to tether the fabric of its reputation by improved rankings and awards, but the events of the past week show that cosmetic changes are not sufficient to engender real market optimisation. Our market must be trusted for our businesses to thrive. More so, globalisation and technology have continued to develop complex financial, social and investment tools which require heavy reliance on reputation, transparency, accountability, fair hearing, and basic principles of justice. If this is the trend and Nigerian businesses seek to expand the scope of their activities to ride this trend, it is necessary to course correct the deepening trust deficit which is at the root of most business and social interface today. The business community needs to prioritise the goal of stability and work even more @Businessdayng
strategically with government not just to entrench the principles of trust in its policies but in its communication in and outside Nigeria. If this involves political reform, then that is also a necessity. We honestly cannot stand by! As we can see, aloofness has far reaching consequences, trillions of naira and the scourging of small and medium enterprises who barely get the chance to breathe. Also, there needs to be urgent coagulation of investment efforts in education of the polity and human resource development. Reprioritization of this is necessary to keep our businesses safe from “hoodlums” and marauders who when we strip the aliases are just hungry and untamed citizens. Lastly, the business community must be more astute to intervene before mere “social tantrums” escalate. Trust is a fundamental lubricant of commerce. In vibrant economies, trust reduces transaction costs and indemnities and promotes the ease of doing business. The lip service to ease has overstayed its welcome. It is time that we focus on systemic changes and urgently so. The garb is not enough.
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Thursday 29 October 2020
BUSINESS DAY
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Can Africa’s regional economic communities produce a continental market? Part 2
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he first part of this article reviewed the African Continental Free Trade Agreement (AfCFTA) and the Regional Economic Communities (RECs) to trace regional trade arrangements in Africa, and compared the phenomenon with what pertains elsewhere. In this part, we will be appraising the activities of RECs to determine their readiness and willingness to move the needle in the direction of the noble goals of the AfCFTA. BEFORE THE AfCFTA Clearly, trade already existed on three levels prior to the 2018 assembly in Kigali, which brought about the AfCFTA agreement. The first level of commercial interaction was among member states of the African Union, as little as it was. The next level was that within the RECs, created as a response to global trends, showing some gains on the low levels have been recorded amongst members. The third level can only be measured by combining the other two segments. It now looks as if that story is set to change under the one market architecture of the AfCFTA. Africa’s integration agenda had been set out by the Abuja Treaty which listed the steps that would lead to a single market. Trading activity on the regional front was recognised, as one of the stages towards achieving the goal. The Treaty also laid out its intention to culminate in the creation of a Customs Union. GETTING AfCFTA READY FOR TAKE-OFF Article 19(2) of the AfCFTA Agreement confers legitimacy on potential of the RECs to determine the fortunes of the AfCFTA. It foists on State Parties that are members of other regional economic communities, regional trading arrangements, an injunction not to detract from levels of regional integration already agreed amongst themselves. It is predicted that those that have attained higher levels of integration can facilitate trade under the AfCFTA. The clarity of this expression is seen where the EAC common external tariff (CET) provided the basis for the EAC members states’ tariff negotiation under the AfCFTA. Whilst it is recognised, that Recs have a had a fair measure of practice, in establishing and operating the rules of regional trading, in compliance with WTO rules, it is commendable to observe the additional steps they are taking, to play by AfCFTA rules. This is understood better, by remembering that from all practical purposes, it is RECs who will settle the outstanding
issues and conduct the negotiations regarding tariff and other matters inter se. So, a flurry of capacity building activities is being undertaken intra- RECs in preparation for ensuing negotiations. The issues of focus in the attempt to be ready to trade point to the reality of what each REC considers to be the areas in which it needs to be more competitive. Joint exercises are currently and constantly taking place between RECs and international trade players and institutions in a pluri-lateral formation, to acquire best practices and strategies, which will keep negotiators, financial and private sectors representatives, experts and observers of RECs busy, equipped and ready to engage. For instance, the United Nations Economic Commission for Africa (UNECA) and the Arab Maghreb Union (UMA) recently rose from an event which analysed the effects of the AfCFTA on Maghreb economies. On another level, RECs are also helping member states prepare commitments consistent with relevant trade structures. From 3-5 December 2019, the Economic Community of Central African States (ECCAS) hosted national experts from the eleven ECCAS Member States to a three-day regional workshop to prepare the sub region’s comprehensive lists of services to be tabled for unhampered trade once borders open. The technical support provided to the member states in drafting the specific lists of commitments especially in the five priority service sectors of the AfCFTA (financial services, transport, telecommunications www.businessday.ng
/ ICTs, professional services and tourism) will help each of these states to be ready for the implementation. RECs seem to be at the forefront of the clamour for member states to ratify and implement subsisting agreements to be able to harness the benefits of full membership. This, primarily, is why the Common Market for Eastern and Southern Africa (COMESA) is urging its member states to take full advantage of the Tripartite Agreement between COMESA, the East African Community (EAC) and the Southern African Development Community (SADC). The 21st COMESA International Trade Fair and High-Level Business Summit was used to rehash the competitive advantages the tripartite agreement will give to its members and how the signatories can assert their rights under the AfCFTA. Furthermore, RECs are pushing for innovation that will enhance trade within Africa and trade with its global trade partners. COMESA recently signed a €3,000,000 (Three Million Euros) project UNCTAD to establish a customs automation regional support centre. UNCTAD’s Dr Mukhisa Kituyi, believes that technology will be a vital tool for the success of trade in Africa with RECs being the core of the architecture. Economic Community of West African States (ECOWAS) for its part has shown how RECs are playing an active role for the AfCFTA. The ECOWAS Commission is actively supporting its member states during the negotiations and coordinating
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their positions through the negotiations. Existing instruments and mechanism such as the Task Force on the Free Movement of Persons and Goods are being touched and amended for member use. Regional infrastructure plans which have been on the table for decades are being revived; and customs reforms are on the menu, to facilitate and enforce already agreed protocols, on free movement of goods within the region, in preparation for the take-off of AfCFTA. The experience gained during the adjustment period for implementation of the ECOWAS CET has provided an insight, into some of the expected effects of trade liberalisation under the AfCFTA is yielding some benefits. As such, West African trade groups like the Fédération des Associations des Industriels de l’Afriquede l’Ouest (FAIAO) and the country associations like the Manufacturers Association of Nigeria, are reassured of the fact that ECOWAS has trade defence mechanisms in the event that they may become necessary to protect regional businesses. The ECOWAS Commission is in the driving seat of this process, as a regional custodian. Various bodies, including the National Offices for Trade Negotiations continue with their internal sensitization programmes for stakeholders towards preparation for the implementation. Wide consultations with key sectors of the economy is producing the buy-in of stakeholders whose lives and businesses will be impacted. Laudably, in recent times, private sector and civil society groups have started to show serious interest and are supporting the RECs on both a regional and continental basis, The partnership amongst the African Union Commission (AUC); United Nations Economic Commission for Africa (UNECA) and the Coalition for Dialogue on Africa (CoDA), led to the first Civil Society Forum on the African Continental Free Trade Area (AfCFTA) themed: “Enhancing Civil Society Engagement in the AfCFTA to Broaden Inclusiveness” on 4 July 2019. The African private sector is ready to scale up investments and production to supply the AfCFTA market. This is obvious from the active participation and contributions from African private sector organisations such as the Pan-African Chamber of Commerce and Industry, the AfroChampions Initiative, the Pan-African Private Sector Trade and Investment Policy Committee and the African Electronic Trade Group in the AFCFTA. Furthermore, some of the @Businessdayng
RECs have also shown their preparedness to take on the items on the priority sector list. ECOWAS now has a regional services policy review document, which highlights areas of common interest within its region and has expressed readiness to support its members in the AfCFTA services negotiation. This underscores its readiness to implement the policies and provisions on the trade in services. It is also expected that, for the trade in goods, ECOWAS will make use of its initiative relating to infrastructure, project and customs reform to facilitate the free movement of goods within the AfCFTA. A bold step in this regard is the finalization of the dual-carriageway highway along the Abidjan-Lagos corridor and the removal of obstacles to trade along this route. IS EVERYBODY/EVERYTHING READY A tour of the RECs readily reveals that the state of readiness is uneven throughout the continent. It is to be admitted that certain zones do not have the connectivity enjoyed by others. There are also member states who may owe allegiances to nonAfrican trading blocks, which have been their partners from colonial times. Some RECs are already operating virtually at Customs Union levels. Therefore, any planning, negotiation or implementation must have regard for the various levels already attained. Happily, because the Agreement recognises these variations, its provisions envisage, protection of sensitive sectors. It also recognises the weaker economies in the region. This treatment each of these categories currently enjoy in their RCECs again serves as an indication of what structural steps are needed to generate and bolster inclusiveness. The additional bulwark is in the fact that virtually all member states belong to more than one REC. With both political and financial arrangements working in sync, it is submitted, that Regional Economic Communities are the easiest vehicles for the delivery of AfCFTA.
ǼLEXis a full service Commercial & Dispute Resolution law firm with offices in Nigeria and Ghana. Contact us: www.aelex.com; @ aelexpartners on LinkedIn, Twitter. Instagram and Facebook; info@aelex.com ǼLEX Notes is a dedicated column, managed by ǼLEX Legal Practitioners and Arbitrators, featuring legal developments and insights.
Thursday 29 October 2020
BUSINESS DAY
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“The Game is the Game”: Key Provisions in Artiste Recording Contracts The biggest mistake you can make is losing yourself in the process of valuing someone too much and forgetting that you are special also – Unknown Georgette Monnou
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INTRODUCTION he Nigerian Music Industry is full of artistes looking to get signed by an established label and similarly labels looking for fresh talent. However, there seems to be a mismatch between the artiste and the label for various reasons. As an artiste, there is nothing more important than the preservation of your creative freedom and working for a label that understands your vision and direction. On the other hand, a label wants to sign an artiste they think will generate profit. In between the various mismatched expectations, what is clear is that in this market, an artiste’s lifespan with a label is usually about three (3) years, especially if the artiste’s content is promoted regularly, and the Nigerian and international market is consuming same. Usually, at the point at which an artiste feels like they have “blown”, they typically begin to make strides towards working independently. For a label faced with this reality, their focus shifts to their ability to recoup on their investment. Below are key provisions an artiste and a label should ensure is present in its recording contracts in order to maximize the limited time they have together. THE ARTISTE’S PERSPECTIVE Creative Freedom It is always advisable that artistes ensure that the label will not exercise any direct or indirect control over their creativity, physical appearance, and style. Even more important as we have seen with Kiss Daniel, is to make sure that an artiste’s name as their trademark and copyright is owned by them. What
more, the artiste’s ability to choose their manager or creative team should also be the sacrosanct, subject of course, to the labels approval, which should not be unreasonably withheld. To go a step further, creative control concerning the selection of masters to be distributed is also important. There should be a provision in the contract for the artiste’s ability to work alongside the label in selecting the masters for distribution bearing in mind that the label which should have come up with a marketing strategy, will need to ensure that the masters selected, align with that plan. Accounting It is important that the label maintains its books and records and provides a report of the gross proceeds received by the label every quarter. This will give the artiste the transparency needed to track their royalty payments. Additionally, the artiste should be given access to the books and accounting records of the label for as long as the proceeds are being generated. Artistes in re-
cent times have also reminded the labels of the importance of proper accounting and record-keeping, which I implore all industry participants to employ.
Record Label’s Obligations There should be a specific obligation on the label to use their best endeavors to promote, publicize, and market the artiste, strategically promote all records, videos, and merchandise (if applicable). This, alongside other obligations, would give the artiste the right to claim for breach of contract in the event a breach was to occur. THE RECORD LABEL’S PERSPECTIVE Breach Clause The most significant risk for the label is to have an artiste either not fulfill the terms of their recording agreement or walk away before the label has had time to recoup on its investment. Most record agreements provide that in the event of a breach of the terms of the agree-
ment, the innocent party writes a notice to the defaulting party that they are in violation. It further states that in the event the breach is not cured within thirty (30) days after receiving the notice, the innocent party can terminate the agreement. This provision is problematic for two reasons: one, the decision on whether the breach has been cured is a subjective one, and two, the innocent party, therefore, can easily walk away from the agreement. In my experience, many artistes have used this provision as a tool to spirit away from their obligations under the recording agreements. Therefore, how does one find a cure to such a sticky provision? In my opinion, I would advise that the termination provision provides that in the event of termination all outstanding and unrecouped expenses are paid in order to safeguard the label’s ability to recoup its investment. Conduct With artistes exhibiting violent and oftentimes morally repugnant behavior, most international recording contracts provide for a conduct clause. The conduct clause imposes an obligation on the artiste not to do any act which might bring the artiste into public disrepute or offend the community or public morals. This is an essential clause for labels, especially if the artiste will be collaborating with international brands or telecoms companies here in Nigeria. There are several artistes who due to their morally repugnant behavior have lost out on telecoms deals sometimes even halfway through the term of the endorsement agreement. In practice, I also see labels employ the services of a “road manager” and a “fixer” whose role respectively is to keep the artiste in check and to mop up any mess made.
in good faith. If labels set out to frustrate their artistes they lose out as no music is being produced or performed by the artiste, thus no revenue stream. The resultant effect is a loss of profit for both the label and the artiste. For an industry based majorly on relationships, where the degree of separation is 1, it behooves on both the talent and the label to find an amicable way forward. In recent times, I have seen some labels agreeing to (a) transfer ownership of an artiste’s masters after a certain period post expiry or termination of the recording agreement; the artiste paying a certain buy-out sum to be free of their obligations under the agreement, or certain labels agreeing to float the artiste’s new label under their umbrella pending when the contract has expired or the artiste has fulfilled their obligations under the agreement. During that period, the artiste fulfills the terms of their recording agreement in order for both parties to move forward amicably. CONCLUSION From a strictly legal perspective, dispute resolution provisions should only either provide for arbitration or court as the final recourse. Having both does not withstand logic. The reason being that if an arbitration award has been given, it is binding between the parties, and in going to the court thereafter, the court will not be able to proceed in hearing the same subject matter of the dispute unless the arbitral award has been set aside, which only further delays the process to a swift amicable resolution. Gergeotte Monnou is a legal practitioner with Olaniwun Ajayi LP.
GLOBALINSIGHT Law Reform ‘worth billions’, Economists find
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n the United Kingdom, the Law Commission’s reform work has provided gains worth billions of pounds to the economy, business and wider society, economists commissioned by the body have found in the first assessment of its kind. Analysis of eleven projects, of the 230 produced in the body’s 55-year history, found predicted economic gains from just five, in recent years, exceed more than £3bn over ten years. The com-
mission costs £5m a year to run. A 2018 report on creating a Sentencing Code should save the government £256m over ten years by reducing court time and legal costs, the study by economists, Ruth Wainwright and Derrick Jones found. Meanwhile, policies being implemented by the Department for Health and Social Care in response to the commission’s 2017 mental capacity and deprivation of liberty report would www.businessday.ng
provide an estimated £1.64bn in health benefits over ten years. Sir Nicholas Green, chair of the commission, said, ‘At one level, in these austerity-straitened times, every governmental body has to provide its value for money. When I came to the Law Commission, it struck me we were not selling ourselves effectively. We are one of the most astonishingly good value for money.’ On the £3bn calculation,
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Green said: ‘I doubt any other government department or arms-length body could match that rate of return for the public purse. At one level, in all our engagements with government, it’s about finding a way we would be able to say… frankly, what we cost is absolute peanuts, but we provide very good value for money.’ The report will provide valuable ammunition the next time a government proposes a ‘bonfire @Businessdayng
of the quangos’. However, Green said the report is not just about money, ‘It’s more philosophical, it’s about the role of legislation. The more we learn about the benefits of legislation, the better we will become at reforming the law.’ The commission will consult on its 14th programme of law reform work next year.
Law Society Gazette
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Thursday 29 October 2020
BUSINESS DAY
BUSINESS TRAVEL
IATA welcomes US military report on low risk of catching COVID-19 on a flight
…says flight agreement between Jordan, Israel profitable Stories by IFEOMA OKEKE
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he International Air Transport Association (IATA) has welcomed the release of the results of testing by the United States Transportation Command (US Transcom) confirming the low risk of COVID-19 transmission onboard an aircraft. The US Transcom testing, which was conducted in August, found that “the overall exposure risk from aerosolized pathogens, like coronavirus, is very low” on the types of airline aircraft typically contracted to move Department of Defense (DOD) personnel and their families, US Transcom stated. More than 300 aerosol releases, simulating a passenger infected with COVID-19, were performed over eight days using United Airlines Boeing 767-300 and 777-200 twin aisle aircraft. “Last week, IATA reported that since the start of 2020, there has been 44 cases of COVID-19 reported in which transmission are thought to have been associated with a flight journey, out of 1.2 billion passenger journeys in 2020. “The US Transcom research provides further evidence that the risk of infection onboard an aircraft appears
to be very low, and certainly lower than many other indoor environments,” Alexandre de Juniac, IATA’s Director General and CEO said. The US Transcom testing showed that the aerosol was “rapidly diluted by the high air exchange rates” of a typical aircraft cabin. Aerosol particles remained detectable for a period of less than six minutes on average. Both aircraft models tested removed particulate matter 15 times faster than a typical home ventilation system and 5-6 times faster “than the
recommended design specifications for modern hospital operating or patient isolation rooms.” Testing was done with and without a mask for the simulated infected passenger. The testing was conducted in partnership with Boeing and United Airlines, as well as the Defense Advanced Research Projects Agency (DARPA), Zeteo Tech, S3i and the University of Nebraska’s National Strategic Research Institute. This is also as IATA welcomed the recent over flight agreement
between the Kingdom of Jordan and the State of Israel that allows for flights to cross over both countries’ airspace. The agreement paves the way for commercial airlines to be able to fly through the Israel-Jordan corridor—which will shorten flight times, reducing fuel burn and CO2 emissions. Airlines have historically flown around Israel when flying east / west operating over Middle East airspace. The direct routing through Jordanian and Israeli airspace will on average
NAHCO denies allegations of money laundering, others by former employee
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he Nigerian Aviation Handling Company (NAHCO) Plc, at the weekend, replied to the erstwhile managing director of its subsidiary, NAHCO Free Trade Zone (FTZ), Baba Yusuf who levelled a series of allegations against it, saying they are baseless and malicious. The company, which expressed surprise that the House of Representatives was going ahead with the hearing on the allegations submitted by Yusuf even when all parties knew that the case is in court, asked Yusuf to wait for court judgment on the matter rather than acting in court contempt. Managing director of NAHCO, Olatokunbo Fagbemi, who led other top managers of the company to brief Journalists at the NFTZ, said throughout his stay in the company, Yusuf did not at any time, raise any of the allegations as issues of concern or requiring Board or management attention. Yusuf had raised petition to the House of Representatives on allegations that officers of NAHCO collaborate with criminals to deliberately import arms, drugs and money laundering and that the warehouse is used by officers to store illegal arms
and money laundering but Fagbemi insisted that “these are unfounded, spurious and weighty allegations intended to smear the corporate image of NAHCO.” She said he resigned his appointment in 2018 after spending seven months as MD of NAHCO FTZ, adding that ‘he was responsible for setting up the NAHCO FTZ business development process, warehouse farcilities and controls as well as having full operational accountability for it and oversaw everything he is now making malicious and false claims about’. Fagbemi said Yusuf attempted and failed to force NFZ to pay him an underserved severance package of N125,900, 000 as his performance
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bonus for seven months of nonperformance as the MD of NFZ. “He then through his lawyer threatened reputational damage to NAHCO by petitioning different investigative bodies to review his tenure and file an action in court for recovery of his perceived claim, warning that his action would materially damage the corporate reputation and operations of NFZ. “Rather than pursue his claim in court as he wrote, he has resorted to several act of blackmail, arm twisting and extortion by writing various petitions with baseless allegations to several agencies and arms of government. These allegations have material implications for national security. We state categorically that we have nothing to hide but we are not in the habit of paying for work not done or value not derived. “We have opened our books and facilities to several investigative agencies and regulators inclusive of NEPZA following the petition and these agencies have written reports on their findings which should aid the House of Representatives committee on Public petitions’ enquiry, rather than the ongoing false and misleading media reportage. “Our operations are properly regulated by the relevant regula-
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tory and governmental agencies, such as Corporate Affairs Commission, the Securities and Exchange Commission (SEC), Nigerian Customs Service, Nigeria Drug Law Enforcement Agency (NDLEA), Department of State Services (DSS), Nigerian Police Explosive Units, amongst others. “We are ready and willing to cooperate with any agency in carrying out whatever investigations that may stem from Baba Yusuf’s tirade as the matter is presently before court, with the next hearing scheduled for 20th October, 2020”, Fagbemi said. On the claim of severance package of N125,900, 000 by Yusuf, Olaitan Ashipa, the company Secretary, NAHCO FTZ, explained that he (Yusuf), was paid N5 million upfront as housing allowance when he assumed office, adding that after an evaluation of his performance, it was discovered that he was not entitled to the amount he claimed. She also disclosed that Yusuf would refund N250,000 apart from the company’s Laptop in his possession. Also speaking, Norison Quakers, Legal Adviser to NAHCO, said the allegations cannot be substantiated, noting that NAHCO has gone to court and will not be deterred by the campaign to smear the image of the company. @Businessdayng
cut 106 km eastbound and 118 km westbound on flights operating from the Gulf States and Asia to destinations in Europe and North America. Based on the number of eligible departure airports, this will result in a saving of 155 days of flying time per year and an annual reduction in CO2 emissions of approximately 87,000 tonnes. This is the equivalent to nearly 19,000 passenger vehicles being taken off the road for one year. Furthermore, should the number of eligible departure airports be increased, and traffic reach preCOVID-19 levels the result will be a saving of 403 days of flying time per year and an annual reduction in CO2 emissions of approximately 202,000 tonnes. This is the equivalent to taking nearly 44,000 passenger vehicles off the road for one year. “The connecting of the airspace between Jordan and Israel is welcome news for travellers, the environment and the aviation industry, during these very difficult times. “The direct routing will cut return journey times for passengers by about 20 minutes and reduce CO2 emissions. Airlines will also save on fuel costs which will help as they struggle to survive the effects of the COVID-19 pandemic,” Muhammad Al Bakri, IATA’s Regional Vice President for Africa and the Middle East said.
NANTA inaugurates committee to protect travellers from fraud
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he National Association of Nigeria Travel Agencies, (NANTA), NANTA, has inaugurated committees to tackle the activities of touts in the business to protect travellers from being swindled of their hard earned money. This is just as the association is set to further engage disciplined professional practices of its members. During the inauguration of three standing committees via a zoom meeting, the NANTA Vice President, Lagos zone, Yinka Folami said, during the past 7 months, the Executive Council of the Zone had received several complaints from unsuspecting travellers that had fallen scamvictims to imposters that parade as Travel Agents. According to Folami, this development was giving the Association members a bad name, adding that they would not fold their hands and allow what he called briefcase travel agents to drag their professional and respect into the mud before the traveling public. “The primary essence is to eradicate touting from our chain and we want to eradicate unevenness from our practices, we want to take care of imbalance in the chain.”
Thursday 29 October 2020
BUSINESS DAY
23
Investor Helping you to build wealth & make wise decisions
Market capitalisation
NSE Premium Index
The NSE-Main Board
N14.980 trillion
2,601.31
N14.999 trillion
2,587.13
NSE All Share Index
Week open (16- 10–20
28,659.45
Week close (23- 10–20)
28,697.06
Percentage change (WoW)
0.13
Percentage change (YTD)
6.91
-0.55 22.25
NSE ASeM Index
NSE 30 Index
NSE Banking Index
NSE Insurance Index NSE Consumer Goods Index
1,168.18
728.51
138.17
1,168.18
1,228.52 1,230.28
349.83
728.51
344.86
137.36
-1.42
-0.59
2.86
-0.69
9.17
-17.91
-22.78
0.79 22.25
0.00 -0.88
0.14 4.45
-3.36
NSE Oil/Gas Index
NSE Lotus II
NSE Ind. Goods Index
473.13
204.14
2,021.11
1,234.85
1,155.12
486.68
202.73
2,020.95
1,234.16
1,153.53
-0.01 10.15
-0.06 14.74
NSE Pension Index
-0.14 9.44
Investing in stocks? Here are analysts’ views that can guide you Storeis by Iheanyi Nwachukwu
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hough Nigeria’s equities market took-off this week on a positive note, it doesn’t mean there are no risks to companies’ earnings after recent #EndSARS protest hijacked by hoodlums put many private and public businesses on the slow lane. With the devastating impact of Covid-19 on Nigeria economy, now amplified by protest, growth may actually weaken beyond initial projections. While you constantly search for stocks that could increase your returns, some of analysts’ views collated here can guide you in making decision. Looking at the performance of their Model Equity Portfolio, analysts at Coronation Research said in their October 19 note said they have enjoyed three consecutive weeks of outperformance against the NSE-ASI, “and to some extent we can attribute this to our decision to hold overweight notional positions in banks.” “These still offer interesting gross dividend yields in the context of falling interest rates in the fixed income
markets”, the analysts added. “Our sense is that Nigerian institutional investors are active in the market, with the result that there is a possibility of further appreciation going forward. “While we do not set ourselves the task of predicting the overall direction of the market (we try to avoid doing this as much as possible), nevertheless we believe our portfolio position is sound in the context of a firm market, and we plan no changes for the coming week”,
Coronation Research analysts had noted. Despite recent protest capable of harming Nigeria’s economy, most market analysts believe that the trend in third-quarter (Q3) corporate earnings releases would influence market performance. GTI Research analysts said, “With more mixed Q3 earnings results expected this week, we see the market sustaining the current positive trend, albeit at a modest pace, owing mainly
to the high system liquidity and low yield environment in the fixed income space.” “The unrest across the country seemed to dampen investors’ confidence at some point last week. However, the imposition of curfews across states which served as the hotbed of protests restored calm to the nation. “The financial system remains robust with liquidity contributing to the continued uptick in the equities market. In addition, the low yield in the fixed income space and the dearth of attractive investment opportunities should stimulate buying interests in fundamentally sound stocks. Against this backdrop, we expect the market to close in the positive zone this week,” Meristem research analysts said. “Despite the heat in the sociopolitical landscape triggered by the degeneration of the #ENDSARS protests, we do not expect a material dent to investors’ appetite for stocks. We reiterate that pent up system liquidity and the hunt for alphayielding opportunities in the face of increasingly negative real returns in the fixed income market remain positive for stocks. However, we advise investors to trade in only fundamentally justified stocks as the
weak macro environment remains a significant headwind for corporate earnings”, Cordros research analysts said. Meanwhile, the Nigerian equities market had defied the uncertainty surrounding the ongoing civil unrest to deliver its fifth consecutive weekly gain. “This week, we expect more earnings to come in and investors will continue to cheery picks on stocks”, United Capital analysts said. “With investors cherry picking attractive counters across sectors, the All Share Index (ASI) maintained its positive performance while neutralising the effect of declines in the Insurance sector, even as local institutional investors continue to take positions in the market. With a number of bellwether stocks expected to release their third-quarter (Q3) 2020 results into the market this week, we expect the market to be largely directed by the expected earnings results”, Vetiva research analysts said. “We also believe the unattractive yield in the fixed income (FI) market will continue to redirect funds into the equities market. However, due to the persistent uncertainties in the global and domestic space, a cautious trading strategy is still recommended in the short term”, Vetiva analysts added.
is looking forward to aligning with the Securities and Exchange Commission through the relevant technical committees to engage with the stakeholders in this unique fintech space to bring structure and support to the commodities ecosystem. “LCFE has also committed to providingaccess to relevant financial information and trading d at a f ro m t h e c o m m o d i t i e s ecosystem through targeted partnerships. We are looking to integrate over Ten million young commodity traders across the Six geo political Zones into the capital market through our LCFE youth commodity trading account platform. It gives me great pleasure at the commencement of this year’s World Investors week to announce the launch of this program on the Lagos Commodities and Futures Exchange. This program will aid the introduction of a fresh blood into the Nigerian Capital Market through the diversification of investment options.
“The World Investor Week (WIW) is a week-long event a i m e d at ra i s i ng awa re n e ss about the importance of investor education and protection, towards engendering the financial and overall wellbeing of the individual, and particularly in view of the effects of the COVID 19 pandemic. “Investor education is very important to us at Lagos Commodities and Futures Exchange (LCFE). The call for diverse investment opportunities has grown increasingly louder in the past few months. As a unique commodities Exchange in the Nigerian capital market, we understand the need to deepen the capital market by creating fungible investment instruments backed by commodities for investors “We applaud the Securities and Exchange Commission for its resilient commitment to Financial Literacy and the role it has played in expanding financial literacy through the Financial Literacy Committee.”
LCFE targets 10m youths for empowerment
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arring unforeseen circumstances, the newly licenced Lagos Commodities and Futures Exchange ( LCFE) is targeting no fewer than 10 million Nigerian youths for empowerment as commodities traders under its proposed seamless capacity building. The Exchange shall leverage on its state-of-the-art technology to bring millennials and those in the group of Generation Z to the commodities and futures exchange ecosystem as future operators. Details of the eligibility criteria are being worked out, but LCFE’s Managing Director and Chief Executive Officer, Mr Akin Akeredolu-Ale confirmed the plan during a programme titled “ LCFE Rings the Bell for Financial Literacy”, on The Exchange in commemoration of 2020 World Investment Week (WIW) which focuses on financial literacy. “The current investing population in the Nigerian capital
market is still heavily populated by the older generation. LCFE is interested in introducing and attracting the younger generation no fewer than 10 million millennials and Generation Z to the capital market by creating awareness about these products and become professionals in commodities and futures trading. That is why LCFE is passionate about financial literacy. “The large varying commodities available due to the vast natural resources in Nigeria provides the opportunities for the generation of different types of investment products. The listing of commodity contracts and commodity-backed commercial papers for capital raising on a commodities exchange by stakeholders of the commodities ecosystem is one of many ways that new and existing investors of the capital market can participate. Other investible options available include futures, forwards and spots contract based on all forms of commodities- Agriculture, Oil and Gas, Solid Minerals and Currencies. www.businessday.ng
We are committed to creating awareness for the investing public through a carefully planned list of knowledge sharing sessions which w ill be conducted in partnership with the regulators and other stakeholders of the capital market and the commodities ecosystem. These knowledge sha r i ng s e ssi o ns have b e e n carefully planned to highlight various commodity finance areas ranging from investible ethical instruments, options for pension fund investment in commodities and many more”, says AkeredoluAle. He highlighted the pivotal role of technology in finance saying : “ As a technology driven commodities exchange, LCFE understands the role of technology in finance and we are exploring all the different and new technically driven trends in the Fintech space. We are engaging with Fintech partners who play major roles in crowd funding, Crypto currency and block chain technology. LCFE
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Thursday 29 October 2020
BUSINESS DAY
Corporate Social Impact
Onuwa Lucky Joseph Editor, (08023314782)
In A Time of Rage and National Outrage Corporates Respond with Grace Onuwa Lucky Joseph
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t’s been one heck of a loaded couple of weeks in Nigeria. What started with the peaceful #ENDSARS protests has degenerated into nationwide looting and vandalisation; first of properties and interests deemed connected to Bola Ahmed Tinubu in Lagos, and then fanning out to looting of warehouses where Covid 19 supplies were stored and then on to looting and large scale destruction of supermarkets, malls, stores and other private owned businesses and properties in many states of the federation. An even grimmer development is the killing of policemen and ruination of police stations leading to looting of the armoury and uniforms of police officers. Not to mention, the jail break some of which have been attributed to government itself while others have been clearly the handiwork of hoodlums who see in the chaos an opportunity to spring their colleagues from jail. There had been palpable anger at government mishandling of the protests, especially after it became apparent that soldiers shot point blank at defenseless protesters who had believed that by holding up the Nigerian flag, they would be safe from any such attempt by security operatives.
It’s still buck passing session as to who actually ordered the shooting. The Lagos State governor, Babajide Sanwo-Olu, said it was orders from “forces beyond our direct control”. Tinubu said, after he visited Mr. Sanwo-Olu at the Lagos State House in Marina, Lagos, that he came to pointedly ask the governor if he was the one who gave the order; which would be preposterous as Nigerian soldiers are not known to take orders from governors. Some had insinuated that it was the largerthan-life Tinubu that orchestrated the shooting in view of the resultant loss of revenue arising from the protesters ‘hijack’ of the Lekki Toll Gate, an operation managed ostensibly by a company owned by the Jagaban.
Well, the import of this article is not the back and forth between govt officials and the Federal Government which made no mention of the incident when President Buhari gave his much anticipated speech on the 22nd of October. His spokesman, Garba Shehu, eventually came out to say the government was working at unraveling how and where the order for the shooting emanated and how many casualties there were and how government was going to manage the compensation, including for security agents who also lost their lives to the mayhem. One of the positive fallouts from this national has been the readiness of corporate organisations to be part
of the rebuilding process for all of our communities that experienced colossal damage at different levels. One of the most touching was SPAR, the huge retail chain owned by the Artee Group, whose Lekki outlet was looted and vandalized by hoodlums. Its response to this unfortunate situation is one that others would do well to emulate. Rather than hand wringing and endless lamentation, SPAR issued a wholesome message that spoke to its need for community revival: “Our Lekki store has been vandalized and looted. But we acknowledge that this is only a setback compared to the larger issues we are all facing as a nation, and our thoughts and prayers remain with Nigerians
everywhere, and for a peaceful resolution to various issues at hand. “Rebuilding a supermarket is hard”, the message continued, “(but) rebuilding a nation is even harder. We stand with you, Nigeria. Stay focused, be the solution.” That message was extremely well received by Nigerians, some of whom quickly signaled their readiness to be part of the clean-up and rebuilding process for SPAR. In the same vein, Coca Cola, while regretting ‘the events of the past days” that have “scarred us all”, averred that its heart goes out to the families of the fallen and injured. The company then said that it “along with our bottling partners, Nigeria Bottling Company Ltd., is committed to making a difference in our communities”. To underscore this, the company said it was making a donation of N20million to its NGO partner, Whitefield Foundation, “to help defray the medical bills of victims in hospitals”. On its own part, Access Bank says it has “set aside a minimum of N50Billion, through interest free loans and grants to support communities, micro, small and medium-sized businesses and our youth”. It’s endearing, the reassuring strap line by both companies: “We’re in this together”. We’ll give you updates as more companies get on the train despite their own individual travails.
A Suggested Low-Cost Poverty Eradication Program for Rural Areas in Nigeria Toyin Oyewole
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igeria presently has the sad distinction of being the country with the largest number of people living below poverty level. The low-cost program set out below could help lift a significant number of our rural poor out of poverty. And given that over 60% of the country’s population lives in the rural areas, a reduction in rural poverty, would shift the poverty dial for the country as a whole. With farming being the major occupation of over 60% of our rural population, the intervention would be seeking to increase agricultural productivity. It would involve state governments encouraging young professionals, retiring public service officers and other interested individuals to go back to their villages as community mobilizers, who would get the farmers there to form cooperatives that would buy fairly used trucks (if need be, on hire purchase) and adopt a policy of trucking the bulk of their produce directly to markets in their state capital, or to Lagos or Abuja, as against selling them to middlemen. A kilogram of produce that the middle men would have bought for about N100 in the village could easily sell for N300 when sold directly to the end consumer in Lagos, Abuja or their state capital. When aggregated, that
differential would come to a substantial amount, a significant part of which should be dedicated to a community development fund that would be used to undertake various community development projects that would transform the community. The development fund could be used to finance empowerment projects such as the following: • Send young people in the community to the Songhai Center in Benin Republic http:// www.songhai.org/ index.php/en/ for training as Agric extension officers, who would bring farmers in the village up to date with modern farming techniques • Acquire community owned small farming machinery of different types to reduce the drudgery of farm labour, make it attractive to youth and help correct the aging population of our farmers www.businessday.ng
• Undertake bulk purchase of fertilizer, hybrid seeds and other farm inputs for onward sale to members. • Acquire mini drip irrigation kits for onwards sale to farmer. This would enable our rural farmers undertake year-round farming; cultivation is presently limited to about 7 month (March – September) across most of the country. Repayment for these could be spread over a 24 month pe-
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riod. These are all aimed at increasing farm productivity and bringing even more funds into the coffers of the cooperative. In addition to the farming interventions above, the development fund would be deployed to execute infrastructural and social projects like the following: • Construction of solar powered boreholes to bring safe drinking water to the people and the implementation of a WASH program; medical health statistics in the country show that over 60% of the outpatient cases in our hospitals pertain to malaria and preventable sanitation related diseases. • Construction and staffing of a rudimentary health centre to provide basic primary health care to the people. • Acquisition and sale of bicycles to cooperative members on credit https://en.wikipedia.org/wiki/Bicycle_poverty_reduction; to provide their families with basic mobility. • Acquisition and sale of small solar powered light and other products to cooperative members on credit https://www.lightingafrica.org/ about/ these bring about marked improvements in the home life of the parents and children. • Undertake labour intensive road construction projects to improve access to market for their farm products. • Undertake labour intensive water @Businessdayng
basin management projects to check soil erosion and harvest run off rain water. • Refurbishment/construction of primary school where the teachers are provided proper training and undertake to ensure that the pupils achieve clear learning outcomes at every stage of the academic journey, and that all graduating pupils gain admission into Federal government unity schools or other top quality secondary schools around the country with affordable fees. • Set up simple agro processing operations to add value to their produce and provide off farm employment for youths in the community. In some cases, this could also help reduce post-harvest wastage, which can sometimes be quite significant. The above list can go on and on, once the funds keep coming in. This is similar to the pattern of the Marketing Boards that the Regional governments used in funding the development accomplished during the first republic, and which can be used to fund the development that we desire and need across the country today, but which the state and federal governments do not presently have the wherewithal to finance with the crash in international crude oil prices and by extension, government revenues.
Thursday 29 October 2020
BUSINESS DAY
Rebuilding together… At Access Bank, we are passionate about delivering superior value to our customers and providing solutions for the markets and communities we serve. Having seen the devastation caused by the events of the last week to some of our customers’ businesses, and the call for a better future for our youth, it is our responsibility to act now. Our intervention will focus on the following:
Firstly, Access Bank is disbursing interest-free loans to help get affected customers’ businesses back on-track. We recognise that speed is important and so we have committed to turning around these loans quickly. Secondly and more importantly, is the empowerment of Nigerian youths and rebuilding public infrastructure.
Loan Intervention: Who is eligible to apply? Access Bank customers whose businesses were directly affected during the national unrest. • •
Loan types- Support both working capital and asset finance loans. The working capital loans will be tenored for a maximum period of 12 months. The asset finance loans will be tenored for a maximum period of 24 months. The loan repayment will be flexible and aligned with customers’ cash flow.
Grants: Access Bank will provide support for the rebuilding of our communities working with corporate Nigeria on these principal areas of focus: • •
Enhanced support for youth in the technology and creative industry. Support for micro businesses working with established NGOs and cooperatives. Continued partnership with LSETF (Lagos State Employment Trust Fund) to empower the youth and micro businesses.
Customers are encouraged to visit https://www.accessbankplc.com/All4one or send an email to All4oneAccessSupport@accessbankplc.com for further enquiries and support. Let’s rebuild together. #All4one
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Thursday 29 October 2020
BUSINESS DAY
Garden City Business Digest Protests & riots: Gov Wike battles to save Rivers economy • Banned but addressed protesters •Warned against violent protests when early signs came •Fought to save businesses by reducing destructions •Mobilised the youths and community-based forces against ethnicisation of riots Ignatius Chukwu
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rom the onset of the riots, Gov Nyesom Wike seemed to stand firm to save the state from going into conflagration. Rivers seemed to be one of the most integrated states outside Lagos with large populations from various ethnic groups and the expatriate community. The consequence is that any uprising allowed to take ethnic pattern would be too bad for the economy. That must be why Gov Wike seemed to take proactive steps. He banned protests but many did not see what he saw. When the civil protesters led by the civil society groups defied the order and marched to Govt House, the governor still came out to honour them with a speech. That ended the anger and youths went home satisfied. One week after, the governor came out denouncing plans to start new wave of protests. Many still thought he was being busy-body, but this one was followed by a more violent one. This time, burning down of police installations, killings, etc took over. The governor moved fast to pinpoint the group he felt was guilty, though
many said other ethnic groups did evil too. The last tangible action the governor took was to fall back to his strength; mobilizing the grassroots people, the youths and community-based forces to stand and defend their state. Now, most leaders across board have commended his actions. He has made a clear distinction between the Igbos and IPOB, warning that nothing should happen to the Igbo. The governor charged the 23 council chairmen and youths in the state to fish out members of the previously proscribed Indigenous Peoples Organisation of Biafra (IPOB) in the State. Gov Wike also warned that any council chairman that allows IPOB to hold processions and hoist its flag within their jurisdictions in Rivers State, risked sack. He made this assertion during a meeting with all the 23 local council chairmen, community development committees and youths leaders at the Government House, in Port Harcourt on Monday, October 26, 2020. These actions seemed to douse the fears of the Hausa communities to drop their own planned actions, it is believed. The governor described Rivers State as the most accom-
Wike
modating state for all Nigerians. To buttress this, he stated that there has never been any historical incident of different ethnic groups clashing in the State as has been witnessed in other parts of the country. He said; “We have lived in harmony with the Igbos, the Hausas, and with Edo people. Everybody that comes to this state we have lived in harmony with. And so Nigerians must commend Rivers State as a place where you have never had problem between this group and that group.” Gov Wike, however, main-
tained that while the people of Rivers State believe in the unity of the country, they would not allow those operating under any guise to unleash violence and criminality on the state. “The federal government declared IPOB a terrorist group; they cannot use Rivers State to be place where they will be launching attack. If you allow that, your future, your children’s future is gone” he told the council chairmen. On burning, he said; “Go to Oyigbo and see what they have done. They destroyed the
court. What did the court do? See the soldiers and policemen they killed and burnt them. Do you think people will sit and fold their arms”. The governor, while calling for vigilance on the part of Rivers people, however, warned sternly that IPOB members should not delude themselves because Rivers State cannot be colonised or annexed by any group; not while he is still the governor of the State. According to him, Rivers State is Niger Delta and will remain in Niger Delta. He explained that while every Nigerian is allowed to reside in Rivers State, but those who wish to do so must live in peace with the people of the State. “Igbos are living and doing their business here and they will continue to live and do their business here. We support that. But that terrorist group called IPOB cannot determine what happens in our state. They cannot tell us where they own. It will never happen and we must not allow it to happen”. Gov Wike charged all chairmen of councils, youth leaders, CDCs to go into their various communities and identify all those IPOB members. He has meanwhile, emphasied that nobody of Igbo extraction le-
gitimately residing and doing business in the state must be harassed. “But there are criminal elements that we must not allow, and they are those who said they are IPOB members. Federal government has proscribed them, I have proscribed them” he said. He called on the people to defend the territory of Rivers State and ensure no part of the State is annexed by a criminal organisation or terrorist organization. “We cannot allow it. All our vigilante groups must be encouraged. Everybody must be at alert. Work with the security agencies to make sure nothing called IPOB exists in this state. No procession. Not even a meeting anywhere. Identify where they hold meeting” he said. Rivers State Commissioner of Youth Development, Ohia Prince Obi, lauded the governor for interfacing with the youths as this would give them a sense of belonging in the affairs of the State. The chairman, National Youth Council of Nigeria in Rivers State, Chijoke Ihunwo, appealed to Gov Wike for clemency for wanted Stanley Mgbere, who allegedly led IPOB members to attack the palace of the king of Onne. The governor turned this down.
Where did we get it wrong: Failing to restructure? Port Harcourt by Boat
IGNATIUS CHUKWU
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illings went on (and may still be going on) in Nigeria, being the level where the #EndSARS protests have degenerated to. So, we have about four stages of this protest: marching round the streets demanding for scrapping of the Special Anti-Robbery Squad (ARS). Soon, they realized they could ask for more, and asked for full police reforms and later good governance as well as demand for President Muhammadu Buhari to resign. The next stage was rioting and looting which criminals introduced to enable them have their own instant profit. Then the killers, those who had big ambitions and big enemies they must use the vacuum to eliminate. At the end of it all, what we have is a state of anarchy threatening to become state of anomie. The sovereign (government) is now struggling to regain authority to avoid the matter slipping into anomie (permanent chaos, permanent anarchy where each person with a gun is government).
Without looking too far for the cause, all fingers point to failure to restructure far before now. The first chance to do it was second tenure of the Obj regime. Yes, he could not have started restructuring in his first term because he was not yet sure-footed. The structure that brought him to power was even borrowed from the late Musa Yar’Adua, later being managed by Atiku Abubabakar (his VP). Obj was supposed to do one term under the agreed rotational and revolutional presidency (between north and south) that brought him to power, but when he used a way to win a second term, it would have been great moment to summon a constitutional conference and resolve major issues such as true federalism, state police, devolution of power and entrenching rotational presidency beyond gentleman agreement or party policy. Imagine what Nigeria would have been by now if this kind of change had been brought as a legacy by Obj. He would have been the next Zik. The next opportunity came when GEJ, another southerner, came to power and ruled for six years. His made it 14 years by the south, yet, restructuring was not touched. Most persons remember that GEJ, coming from the Niger Delta and Ijaw that cried loudest for resource control and true federalism, continued to resist calls for restructuring until when signs of revolution showed at about 2013. He then seemingly hurriedly started a move by 2014. Even at that, he made it clear it would not be deep, and even gave areas that most not be debated.
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It was half-hearted quite alright but most Nigerians managed it that way, no matter how small. But, the fact that it came close to an election was sign of danger to its success. Restructuring; from conference, review processes, drafting and redrafting the statutes, debates in parliaments and state assemblies, final ratification and enactment, would not take less than 30 months. Remember that some boycotts, begging, and reconvening would take place. So, starting it later than your first year of either your first or second year would be risky. The last hope of restructuring showed up but also fizzled out when GEJ lost and President Buhari and the APC took over in 2015. First danger to restructuring is that the new president comes from the old school of unitarist mindset with a central command discipline. For a war General and old age grader, accepting democracy was tough enough, let alone asking him to love restructuring that could send more powers and funds to the states. His body language did not smell of such. The second threat is that restructuring is understood by the north as taking back some of their victories and benefits such as many states, many local councils, spread of oil money to their regions, fat appointments that only unitarist structure can give, and tight control of the country. So, the south seems to be asking for too much if they expect a winner to surrender the booty. Besides, some argue that allowing a northerner to supervise restructuring is not the best for the south. That brings the argument; why did the south sit on power for
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14 years without restructuring only to now disturb the peace with such a demand? The only plausible answer is that the south enters politics without any agenda but is full of long list of wishes which they think are demands. Some believe that southerners are individualistic and selfish; always reaching satisfaction level by getting personal favours and appointments. Later, they suddenly remember the collective good; often, it is too late. Where we seem to now stand is that the entire country seems to be ready for nothing but restructuring. At least, a northern presidential candidate last year put it forward as an agenda; that is historic, though it was not a party decision. What we failed to do properly may have to be done hurriedly, now. The only way to go now is restructuring. If it is not done orderly, it may have to be done haphazardly. If this is what the true EndSARS and violent EndSARS protests would donate to Nigeria, then, the souls lost and property ruined would not be in vain. We must go back to where we got it wrong. Nobody can take Nigeria forward without taking her backward first. Already, most Nigerians have been given an idea of the juicy tomorrow under a restructured Nigeria; where the West would be rich through corporate business, the East would be manufacturing hub in Africa, Niger Delta would be energy hub in Africa, Middle Belt would be food processing capital of Africa, and the North would be food producers, solar power zone, and foreign support centre from the Islamic world. The picture is too rosy to ignore anymore. You sure cannot stop a train set to move.
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Thursday 29 October 2020
BUSINESS DAY
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NEWS
Cost of dollar stable on black market HOPE MOSES-ASHIKE
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Fagba Market in Lagos after the communal clash last week.
Pic by Olawale Amoo
DPR concludes marginal fields bid round, awaits Buhari’s consent DIPO OLADEHINDE
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fter more than three months’ exercise, the Department of Petroleum Resources (DPR) has concluded this year Marginal Fields bid round and it is awaiting the approval of President Muhammadu Buhari who doubles as the minister of petroleum before announcing winners. The marginal field bid round is one of the options the Federal Government is exploring to raise revenue besides depending on monthly crude oil sales, as receipts from oil sales slip into the red zone. Africa Oil & Gas Report, an energy intelligence publication by a renowned analyst, Toyin Akinosho, reported that DPR concluded the analysis of the bids in the last two weeks and has sent the results to the minister of state for petroleum, Timipre Sylva, who is to deliver it to President Buhari. “While the round started with over 500 applications,
it closed with at least 100 applications making it all the way, each delivering at least $115,000 to the Nigerian treasury in the process,” the intelligence publication said. Other sources close to the bid round said highly contested fields like Egbolom with reserves of about 220 million barrels is expected to attract a minimum of $5 million as signature bonus (an amount of money paid by bid winners on their marginal fields) while Usoro field on OML 10o and Ugbo field on OML 40 were also among the top contenders for investors. Efforts to get the reaction from DPR’s spokesman Paul Osu proved abortive, as calls and messages were not responded to as at close of business on Wednesday. “ Ni g e r i a d e s p e rat e l y needs revenue from this marginal bid round, the presidency needs to act quickly and allow successful investors kick off operations at the earliest moment,” Niyi Awodeyi, CEO at Subterra Energy Resources Limited said. The DPR did something
different in this year’s bid round to improve revenue levels unlike previous bid rounds; they introduce a signature bonus that varies for each of the 57 fields planned for auction. This was prompted by an oversight during the 2003 rounds when a flat signature bonus was applied to all fields. It happened that owners of Assaramatoru field and Umusadege fields paid the same signature bonus rate even though there was a huge difference in their production levels. Assaramatoru field barely produced 1,000 barrels per day whilst Umusadege field was awash with around 20,000 barrels per day consistently for over five years. With more due diligence, the government could have gained a significant amount of money from a higher signature bonus charged to Umusadege. Awodeyi explained that some of the 57 fields available for auction are in the offshore terrain which constitutes a major challenge for most investors and can affect the chances of achieving first oil
within the shortest possible time. Nigeria has not held marginal field bid rounds since 2003. Twenty-four fields were awarded to 32 companies, some of them two to a field, in 2003. More than any other time in its history, Nigeria desperately need revenue from the marginal field bid round as the country is facing a challenging financial situation worsened by the pandemic and unstable oil prices; which makes the implementation of the 2020 budget a “herculean task.” Data compiled from the breakdown and highlights of 2020 budget performance presented by the Minister of Finance, Budget and National Planning, Zainab Ahmed, showed that in the first seven months of 2020, Nigeria recorded N2.5 trillion in revenue and spent about N6.25 trillion creating a record budget deficit of N3.7 trillion. “The government needs to take adequate steps as fast as possible, time is running out,” Awodeyi said.
LCCI urges FG to assist Lagos rebuild assets destroyed by hoodlums ODINAKA ANUDU
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he Lagos Chamber of Commerce and Industry (LCCI) has urged the Federal Government to assist the Lagos State Government in rebuilding assets destroyed by hoodlums who hijacked the #EndSARS protest. Peaceful #EndSARS protesters were shot by Nigerian soldiers in Lekki, Lagos, providing hoodlums the opportunity to loot and destroy public and private assets, including police stations. The extent of the damage is yet to be ascertained, though the House of Representatives Speaker Femi Gbajabiamila said the state needs N1 trillion
to rebuild destroyed properties. Due to this, the LCCI said Federal Government’s support has become necessary in view of the current challenging economic conditions that Lagos State is already grappling with. “That the Federal and Lagos state governments should collaborate to provide support (in the form of grants) to all the victims of the unfortunate outcomes of the protest and the subsequent attacks and destruction of properties and assets,” Toki Mabogunje, president of the LCCI, said in a statement on Monday. She recommended that families of all those who lost their loved ones be adequately www.businessday.ng
compensated, urging banks to which some of the victims were indebted to demonstrate and uncommon compassion towards them in respect of their indebtedness. She said as corporate and individual citizens, this is the time to demonstrate a culture of compassion in being ‘our brother’s keeper’ by supporting victims of the unfortunate incident. “We note the setting up of the Judicial Panels of Inquiry in various states to investigate the circumstances that led to this unfortunate incidence with a view to avoiding a repeat of such occurrences in the future,” Mabogunje said. She urged all citizens that have suffered from all forms
of police brutality and injustice to cooperate with the Lagos State Government to bring about restitution and some form of closure on the unfortunate incidences. “We believe there are lessons to be learnt by all concerned – protesters, the government, security agencies and citizens. We should sustain the status of our country as the biggest economy on the African continent; and preserve the status of Lagos as a leading commercial city in Africa and the commercial hub of the West African sub-region.” “We should collectively strengthen our resilience, build an inclusive economy and deepen citizen engagement,” she further said.
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he cost of purchasing one dollar was stable on Wednesday at between N460 and N461 on the black market. At the Bureau De Change (BDC) segment of the foreign exchange market, naira weakened by N2 as the dollar was sold at the rate of N462 on Wednesday as against N460 since last week. The foreign exchange market has been under pressure since March 2020 following a sharp drop in oil prices as a result of Covid-19 pandemic. BDC operators funded their accounts on Wednesday in anticipation for dollar disbursement by the Central Bank of Nigeria (CBN) on Thursday. Naira gained N0.33k at the Investors and Exporters (I&E) forex window, where the dollar was quoted at N385.67k on Wednesday compared with N386.00k on the previous day, data from FMDQ indicated. Analysts at FSDH research noted that most participants maintained bids between ₦380.00 and ₦393.11 per dollar. Earlier, the market opened with an indicative rate of N385.89k on Wednesday, which represented N0.97k depreciation over N384.92k opened with on Tuesday. The Nigerian treasury bills secondary market closed on a flat note on Wednesday with
average yield across the curve remaining unchanged at 0.53 percent. Average yields across short-term, medium-term, and long-term maturities closed at 0.38 percent, 0.32 percent, and 0.68 percent, respectively. At the Primary Market Auction held on Wednesday, the CBN offered NT-bills worth N134.37 billion across the 91-day (N29.84 billion), 182-day (N10.62 billion), and 364-day (N93.91 billion) tenors, a report by the FSDH stated. “We expect trading activities to pick up towards the end of the week as investors seek to place their unmet bids into the NT-Bills secondary market. Furthermore, expected NT-Bills maturities worth N154.37 billion could spur demand, putting further pressure on yields,” said the analysts. The Overnight (O/N) rate declined by 0.13 percent to close at 1.63 percent from 1.76 percent on the previous day, while the Open Buy Back (OBB) rate remained unchanged at 1.00 percent. The money market rates remained low due to abundant liquidity in the market. In the Open Market Operation (OMO) bills market, the average yield across the curve closed flat at 0.51 percent. Average yields across short-term, medium-term, and long-term maturities remained unchanged at 0.42 percent, 0.50 percent, and 71 percent, respectively.
FG introduces disease resistance maize to farmers in A’Ibom
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he Federal Government under the National Agricultural Seed Council (NASC) has introduced disease resistance maize to farmers in Akwa Ibom. Mmoeyak Usua, the regional director of the council, South-south zone, disclosed this during the 2020 Farmers’ Field Day organised by NASC in collaboration with Premier Seeds, Du Pont and Bayer Seed Companies in Uyo on Wednesday. Usua said that the hybrid seed known as OBA SUPER 13 has the capacity to produce between 5,000 tons and 7, 000 tons of maize per hectare, three times a year. He said the high yielding seed passed through a series of international research tests and it was discovered as having superior quality over the local seeds. He said the regulatory agency had tested the seed and found it to be disease and grass resistance. “This particular demonstration was meant to compare the superiority of the hybrid seed with local materials. The hybrid does better than the local materials. @Businessdayng
“They are disease and grass resistance, and the cobs are very big. They are matured and doing well, because when we planted them; in the whole of August 2020, there was no rain but they survived. It can be planted three times a year.” He said that the seeds had passed through a series of research tests. First, it has its origin from the International Institute for Tropical Research. They passed it down as foundation seed where it was certified. “We want farmers to know that there is an improved seed and the new variety has high yielding capacity of between 5,000 tons and 7, 000 tons per hectare,” he said. Usua warned farmers in the region to buy the seed from only registered seed companies. The commissioner for agriculture, Akwa Ibom, Glory Edet, applauded the council and the seed companies over the improved seed introduced to the farmers. Edet, who was represented by the Assistant Director, Agriculture Directorate, Edet Udoaka, appealed to government to continue to support maize farmers to enhance food sufficiency in the country.
28 BUSINESS DAY
Thursday 29 October 2020
NEWS
Management skills critical to building sustainable business - Development Bank MD SEYI JOHN SALAU
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he managing director, Development Bank of Nigeria Plc (DBN), Tony Okpanachi, has emphasised the need to equip Nigerian entrepreneurs with critical management skills to enable them build structure required for effective management of their businesses. Speaking at a recent capacity training for Micro, Small and Medium Scale Enterprises (MSMEs), Okpanachi said although funding constituted a major challenge to MSMEs in Nigeria, capacity building was critical for young entrepreneurs. “As a development financial institution established to bridge the financial gap through our participating financial institutions, our strategic focus is providing liquidity, credit guarantee, and capacity building for MSMEs to be more productive,” said Okpanachi. He noted that the capacity building initiative was an integral part of the bank’s mandate to drive economic growth by empowering MSMEs with the skills required to improve their capacity and productivity. “So, our objective is to equip entrepreneurs across sectors of the economy with requisite management skills to develop viable business plans, access funds, and effectively manage their business growth. Through this
training, we will enhance their entrepreneurial and managerial competencies,” he said. The training was held in furtherance of DBN’s mandate of building the capacity of the MSMEs and equipping them with the required skills needed to improve their competence in developing and defending a viable business plan, improve their capacity to access funding, as well as imbibe in them the discipline required for efficient utilisation of funds. In the wake of the Covid-19 global pandemic, small business owners were lectured on digital marketing strategies and basic promotional tools on accessing business opportunities and improving selling skills as well as presentation skills and development of business plan. To help these small business owners with book-keeping which is crucial to accessing loans, DBN partnered with financial experts on entrepreneurial finance and accounting; how to develop financial records; financial analysis, and prepare a balance sheet of business activities. Participants expressed appreciation to DBN especially in the area that touched on online marketing and business profiling, as it has helped to increase confidence and competence on business growth strategy and development.
Estimated billing, metering still biggest pains of electricity consumers ISAAC ANYAOGU
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lmost seven years after the power sector in Nigeria was privatised, electricity customers still identify estimated billing, lack of meters and frequent service interruption as their biggest pains, defying every attempt at remedy. In the newly released quarterly report of the Nigerian Electricity Regulatory Commission (NERC), the 11 power Distribution companies (DisCos) received a total of 204,506 complaints during the first quarter of 2020. This translates to an average of 2,247 complaints per day compared to a daily average of 1,933 complaints received in the preceding quarter. According to NERC’s data, 22.69 percent of all complaints relate to billing, 20.27 related to metering, and service interruption accounted for 18.40 percent of all complaints. Others were disconnection which accounted for 12.06 of the complaint and delayed connection which accounts for
6.55 percent of all compliant. NERC has also set up forum offices that can constitute panels to review unresolved disputes, as enshrined in the Commission’s Customer Complaints Handling Standards and Procedure (CCHSP) Regulations. As of March 31, 2020, the Commission had 30 operational Forum Offices in twentynine states and Abuja. They had a total of 2,881 complaints during the quarter (including 1,258 pending complaints from the fourth quarter of 2019) from customers who were dissatisfied with DisCos’ decision on their lodged complaints. According to the commission, complaints around billing accounted for 48.63 percent of all cases and metering complaints were responsible for 33.22 percent of all cases reviewed. An analysis of NERC’s previous reports indicates a similar pattern raising questions on the efficacy of programmes by the government and sector players to resolve the issues. NERC in February placed a limit on how much power dis-
tribution companies (DisCos) can charge some classes of customers on estimated billing. All unmetered R2 and C1 customers basically residential and small business users, would not pay more than N1,870 per month for energy consumed. Single-phased small users were not to pay more than N200 per month during the transitional period till they are metered. The order, while popular did not address why many Nigerians cannot get meters to ensure equitable electricity billing. The regulator identified constraints including changes in fiscal policy and the limited availability of long-term funding has led to limited success in the meter roll-out yet it pushed on the regulated the burden of resolving them. The net effect is that the regulator was incapable of handing out real sanctions against DisCos for not capping estimated bills to customers and could not resolve the growing angst by customers. Though complaints reduced in some DisCos based on the regulation, overall, it was not a sufficient deterrent.
Estimated billing in the Nigerian Electricity Supply Industry is an example of how a solution can become a problem. The 2007 meter reading, cash collections, and credit management regulation, enacted by NERC was created to enable power distribution companies (DisCos) to bill a customer when they are unable to gain access to his premises, but it soon became DisCos most favoured method of billing customers. Customers are dissatisfied with the method because billings are not based on DisCos’ discretion rather than their consumption. To address these challenges, the regulator introduced the Meter Asset Providers regulation in 2018 which allowed for third-party investors to supply meters to customers at a fee, repayable in instalments, or at once. However, most MAPs lack access to long-term funding, and the government’s introduction of a 35 levy on meters, ostensibly to encourage local production, soon worsened the situation.
Oyo approves N9.3bn for purchase of 106 mass transit buses REMI FEYISIPO, Ibadan
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yo State government has approved N9.3 billion for the purchase of 106 new buses for public transportation. The state also approved the construction of two link roads around Akobo and junction improvement contracts at Challenge, Ibadan, the state capital. At a joint briefing on the outcome of the state’s executive council meeting on Wednesday, Wasiu Olatubosun, the commissioner for information; Adeniyi Farinto, the commissioner for budget and planning, and Seun Fakorede, commissioner for youth and sports, said that the approval was in line with the drive to transform the transport sector and improve the state’s economy. Fakorede said effective transportation was key in the economic development of any nation, adding that the purchase of the buses would greatly assist the development of intra-city movement and boost the economy. According to him, the operations of the Bus Rapid Transit (BRT) scheme as a means of public transporta-
tion have been accepted in some Nigerian cities over the years, and would be effective in Oyo State. “I wish to state that the effort and the commitment of the present administration are revamping the agriculture sector in the state. So, it is imperative that the state provides adequate and effective means of transportation, of moving persons, goods, and services, which will have a multiplier effect on commerce and economic development of the state.” “A company, by the name Petrobridge Nigeria LTD, has been identified as having the capacity and the capability to immediately supply 106 units of the buses to complement the transportation-related activities in Oyo State. And, to this end, it is worthy to note that there is an urgent need to purchase 106 units of brandnew buses to complement the fleet at the PTS and also to improve the mass-transit system in the state and, by extension, boost the economy of the state. “Therefore, the council considered and approved the supply of 106 unit of brandnew buses at a total cost of N9,395,427,659.5 only, all taxes inclusive.” www.businessday.ng
Seyi Makinde (l), governor, Oyo State, addressing representatives of the ENDSARS group, artisans, motorcycle riders, taxi drivers and youths during a meeting in Ibadan.
Nigeria must invest more in SMEs, industrial sector to mitigate unemployment- expert
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business consultant, Ne r u s E kez i e, ha s urged the Federal Government to intensify investment in Small and Medium Enterprises (SMEs) and industrial sector in order to mitigate Nigeria’s rising unemployment, which currently stands at 27.1 percent. Ekezie, a former director of the National Association of Small and Medium Enterprises (NASME), stated this while speaking with journalists in Lagos on Wednesday. “Empowering the teeming youths through SMEs would curb societal unrest. It will ensure the youths contribute more to national development because of their significant number to the country’s demography,” he said.
Recall that the Federal Government, through the Economic Sustainability Committee, had announced specific programmes aimed at cushioning the impact of Covid-19 on MSME businesses. Through the Nigeria Economic Sustainability Plan (NESP), the government has put in place the National MSME Survival Fund and the Guaranteed Off-take Schemes. Both schemes are at the core of the N2.3 trillion stimulus package also known as the NESP being implemented by the Federal Government. It is borne out of the Federal Government’s commitment to help cushion the impact of the Covid-19 pan-
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demic on the economy by saving existing jobs and creating new job opportunities. Initiatives under the project include the artisans and transport grants under which electricians, mechanics, plumbers, painters, taxi drivers and other artisans are being empowered with grants. The Federal Government has also offered free business registration for 250,000 Micro, Small and Medium Enterprises (MSMEs) nationwide under its recently launched Survival Fund Scheme. Ekezie also urged the government to invest more in agriculture for the youths to harness the sector’s value chains. He also suggested that government should boost @Businessdayng
the nation’s industrial output, due to the sector’s importance to development. “Enhancing the industrial sector will develop the economy and accelerate job openings. The issues of agitations among young people in recent times will subside in no distant future,” he said. PricewaterhouseCoopers estimates that Nigeria’s unemployment rate may rise to 30 percent by the last quarter of 2020 amid slow economic growth. Analysts at PwC led by the partner and chief economist, Andrew Nevin, noted that an estimated real gross domestic product of about N280,000 was required to absorb a single employed person from Q2 2020 to Q4 2020 due to the economic effects of Covid-19.
Thursday 29 October 2020
BUSINESS DAY
29
NEWS
2021 budget: NHIS to spend N191.7m for National carrier tops FG’s aviation roadmap for 2021 maternal-child health project KAMARUDEEN OGUNDELE, Abuja
...urges Reps to pass NHIS mandatory bill JAMES KWEN, Abuja
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he National Health Insurance Scheme (NHIS) has proposed to spend N191.7 million on maternal and child health project that would cover 15,184 lives across the country in 2021. Executive secretary of NHIS, Muhammad Sambo, disclosed this Wednesday during the defence of the 2021 budget proposal before the House of Representatives Committee on Healthcare Services. Sambo explained that the project, which will be executed at a premium rate of N12,000 per life, per annum, will benefit 410 lives in each of the 36 states of the Federation and the Federal Capital Territory (FCT), adding that N4.9 million would be allocated to each state for the project. He also disclosed that the sum of N129.2 million was proposed in the 2021 budget for a health project for the elderly, covering about 10,235 lives across the country.
Speaking on the performance of the 2020 budget by the Agency, Sambo said out of the N164 million appropriated, N72.47 million had been released but had not been adequately utilised following the outbreak of the Covid-19 pandemic. “First release came in March and at that point the Covid-19 pandemic had started and the second release came in July this year still during Covid-19 so NHIS has not been able to spend these resources but with the total lift on the lockdown we have asked the responsible departments to make submissions to accelerate implementation. So, within a couple of weeks most of these monies that you saw appropriated will be put into action,” he said. Responding to concerns by chairman of the committee, Yusuf Sununu, on why the scheme cannot utilise the 2020 budget because of the Covid-19 pandemic, Sambo said: “During Covid-19, there was a deduction of N300 million that was done by the office of the accountant-general,
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which we even complained to you and the minister. “We wrote a letter because we couldn’t see the reason why the constituency project money should be deducted. I think NHIS having paid into the constituency, we wrote a letter they raised the mandate to pay us back, the deduction was done across sectors which is said to be a loan and we’ve made a complaint to accountant-general office and we’re told it is receiving attention”. The NHIS boss also called on the House to concur the National Health Insurance Mandatory Bill already passed by the Senate to enable to the county achieve universal health coverage. “Chairman let me say that the Senate has passed the National Health Insurance Mandatory Bill and it has been transmitted to the House and we are craving the indulgence of the House now to help us in ensuring concurrence quickly because without concurrence it will be very difficult for us to have total picture because we want to achieve universal health coverage.
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he Federal Government has said floating a national carrier is its top priority in the road map for the aviation sector in 2021. Minister of aviation, Hadi Sirika stated this at the 2021 budget defence of the ministry and its agencies before the senate committee on aviation at the National Assembly, Abuja. The minister said the road map which he noted would be implemented through Public Private Partnership (PPP) has establishment of a national carrier as its top priority. Shedding more lights in an interview with journalists after the budget defence, Sirika said that the much talked about national carrier, Nigeria Air, was part of the aviation sector roadmap, which would be delivered before 2023. “We are on it. The transaction adviser has brought in the outline business case. It is being reviewed by ICRC. Soon after it finishes, it will go to the federal executive council and it will be approved. We will not leave this government without having it in place.” On the need to build another airport in Lokoja, the Kogi State capital as an alter-
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nate to the Nnamdi Azikiwe International Airport, Abuja, he said, “Lokoja is an important northern town. It is a cosmopolitan town, it is a mini Nigeria and it is important in growth and development of our country.” He added: “We have a lot of agricultural activities around there. There is fishery, there is perishable item production and so on. So siting an airport there is quite apt. For me, it is is something we should have done long ago for its importance,” Sirika said. Sirika said the government was working hard to fix the airports in deplorable condition based on peculiar priority. “We have being improving these airports one airport after another. We don’t have the resources to take them all at once. We are attending to them, we look at an airport and find which is that safety item and which is that item of security that needs attention first before we now turn to other matters. “Certainly we are making Ilorin one of the best airports because in the first place it was an alternate for Lagos,” he said. Speaking earlier during the defence, Sirika said the sum of N78.9 billion was being proposed for capital expen-
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diture with emphasis on the implementation of the aviation roadmap. He listed other projects to be executed to include the establishment of Maintenance, Repair and Overhaul (MRC) facility, development of Agro - Allied Cargo Infrastructure, establishment of Aviation Leasing Company, Search and Rescue Unit and establishment of Aerospace University with the support of International Civil Aviation Organisation (ICAO). The minister, who claimed that aviation was the fastest growing sector in Nigeria, said the Federal Government was in the process of taking over some airports from states. According to him, 10 new airports are underway in response to the growing demands in the aviation sector in Anambra, Benue, Ekiti, Nasarawa, Ebonyi and Gombe, among other states.
CHANGE OF NAME
I formerly known as Jimmy Love now wish to be kn own and addressed as Love Akanimon. All documents bearing my former name remain valid. General public, please, take note.
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Thursday 29 October 2020
BUSINESS DAY
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Nigeria is spending $35 per capita to combat COVID-19 - Aig-Imoukhuede … 98% less than global average of $2,000 … encourages private sector to increase contribution Endurance Okafor
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ub-Saharan Africa Governments do not have the firepower required to throw a blanket over coronavirus (Covid-19) and as such need assistance in combating the deadly virus, according to Aigboje AigImoukhuede, a Nigerian banker, investor and philanthropist. The former group managing director of Access Bank believes Africa is able to buy itself some time by fast-tracking emergency responses to the medical challenges, but he is worried the time will be wasted if it does not roll out sustainable measures to fill the financing gap and long-term needs. “The world is spending over $2,000 per capita to combat Covid-19, while Nigeria, for instance, is spending $35 per capita (as at July 2020),” Aig-Imoukhuede says. Going by BusinessDay estimates, that is 98.25 percent less than global average. Aig-Imoukhuede made this known at a high-level meeting put together by the IMF and the World Bank geared towards addressing the continued economic challenges posed by Covid-19. During Aig-Imoukhuede’s three minutes intervention at the roundtable discussion, he explained that “private sector accounts for 5 percent of the total funding mobilised in Africa versus less than 1 percent in other areas of the world, so our private sector is not doing badly but we need to do more.”
Meanwhile, the event held virtually on October 9, 2020, brought together African policymakers, international institutions, bilateral development partners, and representatives from the private sector to: provide a platform for African policymakers to highlight the acute challenges faced in their fight against the pandemic and efforts to mount a crisis response and promote a strong and sustainable recovery; take stock of promising country experiences and support provided by the international community in Africa’s fight against the pandemic, and agree on additional concrete measures from both public and private sectors to fill the large medium-term investment and financing needs that countries are facing. Explaining that the medical, economic and social challenges that are described in the background note to the event are not new to Africa, as they existed pre-Covid-19, the co-founder of Nigeria Solidarity Support Fund, an all-digital crowdsourcing philanthropic platform, said Africa needed more funding from the international financial institutions starting with debt relief. “We also need the international private sector and Africans in the diaspora to come to the table. We need innovative financial platforms such as the Nigeria Solidarity Support Fund, which is established for Nigeria by Nigerians in partnership with the Global Citizen organisation.”
FG cautioned against takeover of non-viable airports
… as FAAN faces financial strain IFEOMA OKEKE
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he Federal Government has been cautioned against takeover and management of unviable airports across the country amid financial strain faced by the Federal Airports Authority of Nigeria (FAAN). This advice by experts in the aviation sector is coming after Hadi Sirika, minister of aviation, at the meeting with the Senate Committee on Aviation for the 2021 budget defence on Tuesday disclosed that the Federal Government would take over 10 airports across Nigeria. The minister said the decision was to further boost the aviation industry, having realised that it was the fastest growing sector of the nation’s economy.
Sirika listed the airports to be taken over to include those of Anambra, Benue, Ekiti, Nasarawa, Ebonyi, Gombe, Kebbi, Delta and Jigawa. However, experts have raised concerns over the decision, explaining that the Federal Government does not have the financial ability to manage airports that are not viable, especially at a time when the sector is still reeling from the impact of COVID-19. “Why must FAAN run all airports? Is it necessary? The Federal Government should only be interested in having FAAN run the airports of entry, and profitably too,” said Edward Boyo, founder and managing director, Landover Company. “What is too much in an airport for a management company to run? What is too
much in an airport for even a state to run? Every state should be encouraged to establish an airport of not more than 2000m runway length excluding clearway length. Where are all the retired FAAN staff? Are they unable to utilise their experience at state airport companies?” he asked. Boyo stated that FAAN is suffering the yoke of the weight of its greed, adding that the rules and standards to run airports are clearly spelt out by International Civil Aviation Organization (ICAO) annexes. He further stated that airports are licensed and subject to NCAA and state security regulations and are meant to be state infrastructure like schools and hospitals; they do not need to make profit but are to complement social growth. Seyi Adewale, CEO, Main-
stream Cargo Limited, told BusinessDay that in reality, the Federal Government cannot take over the state-built airports except they have major financial stake in any of the state-built airports or the states may not have the technical know-how or competence to handle or manage the aviation security aspect due to lack of duly trained and certified manpower, according to the Civil Aviation Authorities (CAA) requirements or standards. Adewale explained that technically, the Federal Government can take over this important aspect through FAAN to manage the very important aspects of security at the airports but when the states have trained, qualified and certified
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MTN Nigeria’s revenue jumps 13.9% in 9M’20 on data Presidential Taskforce claims no gridlock in . . 3.9m new customers in Q3 push total subscribers to 75m Gridlock on Ijora-Apapa Bridge, in Lagos, yesterday.
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evenue of MTN Nigeria rose 13 percent in the nine month period of 2020, after the company sustained increased earnings in all its services business units - including data, voice, digital and fintech. Total revenue of the telecoms provider, in the period, hit N975.8 billion, compared with the N856.5
billion raked in the same period of the previous year, analysis of its nine-month financial scorecard, available with the Nigerian Stock Exchange (NSE) shows. The firm also saw a significant increase in customer base with an additional 3.9 million new customers into its network just in third quarter alone, bringing its total subscribers to 75 million. Similarly, its data sub-
scribers also increased by 37.7 percent to 30.7 million, up from 22.3 million data subscribers reported a year earlier, as more users opted for more data usage to keep in touch with families at the peak of the coronavirus pandemic. MTN generates revenue from two main sources: Services, which comprises revenue from data, voice, fintech and digital; and other Services, made up of revenue from SMS, USSD, Information and Communication Technology (ICT) and infrastructure and devices. While all four sub business units under services saw sustained revenues with the biggest revenue growth coming from the digital arm of the business, revenues from other services dipped marginally. Revenue from voice calls
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Pic by Olawale Amoo
Apapa despite evidence to the contrary Odinaka Anudu
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residential Taskforce Team (PTT) on Apapa Port has said there is no gridlock in Apapa, but evidence shows that there is constantly heavy traffic leading into the premier port city - almost every day. At a virtual dialogue held by the Lagos Chamber of Commerce and Industry (LCCI) on Wednesday, Kayode Opeifa, vice chairman of the PTT, said contrary to popular opinion that there was gridlock at Apapa, “what occurs at the port is ‘in-port congestion’.” However, while Opeifa was making this claim between 1.30pm and 3.20pm yesterday, Ijora to Apapa Port was locked in traffic jam, making entry and exit impossible. Many who had one business or the other in Apapa spent over three hours to get into the
ports, with others on commercial vehicles alighting to go back home, BusinessDay observed. But, according to Opeifa, the majorchallengeattheportisthat businesspeople enjoy circumventingthestandardprocedures and are often in a hurry to move theirgoodsinandoutoftheports. He explained that exporters are ‘too desperate’ and move their containers into AP Moller, rather that Lillypond where there is convenience and no extortion or bribery would likely take place. Exporters even buy stickers at N30,000 to N50,000 and resell to others in the same line of business at much higher rates, he said, stressing that there are many outsiders in Apapa who have no business in the port city. “Someofthemare‘one-man show’. They have no tyres and have no business with the ports. Thesearemiddlemenwhoeven
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make more money than the real players,” he alleged. Opeifa further advised the organised private sector to stay within the standard operating procedures, urging them to confront shipping lines if they are paying demurrages. There are no more trucks sitting on Mile 2 to Oshodi at the moment because of the level of work done by the PTT, he said, stressing that the efficiency of terminal operators determines the number of trucks that go in and out of the port city. There is an ongoing construction at the ports with only three out of eight gates operating, he said. He suggested a multi-modal transport system with rail, road, water and others working at full capacity, stressing the need to improve port operations. Apapa and Tin Can are Nigeria’s premier ports, providing over N10 billion for @Businessdayng
the country every day. But the area has become a beehive of chaos because of traffic jam and corruption by many players, including security officials. Donald Uche, chairman, Freight Forwarders Group, suggested that Apapa Dockyard be mapped out for export cargo. Uche, who disagreed with Opeifa on many grounds during the dialogue, noted that there was so much extortion at Apapa and Tin Can ports, calling for new palliative roads to enable exporters and businesspeople move their goods. Ayesha Akinkugbe, a resident of Apapa, said the PTT team worked so hard to make Apapa better in the past, but the current situation was worse for residents. Ijora is a bottleneck because of trailers and tankers parked on the bridge, she said, stressing that Apapa is not just for business but also a resident area.
Thursday 29 October 2020
BUSINESS DAY
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News Suspension of new power reflective... Continued from page 1
September 28 to October
11, 2020. “Following a joint communiqué issued by the Federal Government of Nigeria and the labour unions, the FGN agreed that the recent review in electricity tariffs would be suspended by the Commission for a period of 14 days to further consultations of negotiations between the parties,” the Commission said in an order published September 29. NERC directed all DisCos that “all tariffs for end-use and market obligations of the DisCos during the 14-day suspension shall be computed on the basis of rates applicable as at August 31, 2020.” Few days before the expiration of the suspension order, the Federal Government said it had acceded to the demands by labour unions to provide some form of relief for Nigerians facing difficulties on account of Covid-19, by providing N5 billion monthly subsidy till December. In the deal seen by BusinessDay, the Federal Government agreed to a two-phased approach to solving the impasse - a short- and mediumterm solution. The immediate solution will see the Federal Government pay N5 billion monthly as subsidy till December 2020 while the short-term approach involved reviewing the basis upon which the SRT was increased, auditing the revenue of DisCos and evaluating gas pricing. According to the terms of the immediate resolution, electricity customers across Bands A-C, who saw a tariff increase, will enjoy different levels of discount. Customers in Band A will see a 10 percent reduction in tariff increase, which amounts to N2.49 per kilowatthour adding N1.8 billion bill to government’s spend. Electricity customers in Band B will enjoy a 10.5 per-
cent reduction in tariff increase, which amounts to N2.24 per kWh and will cost the Federal Government N900 million monthly. While electricity customers under Band C will enjoy a 31 percent reduction in tariff increase amounting to N5.46 per kWh. This will cost the Federal Government N2.350 billion every monthly. Customers in Bands D and E, whose consumption was not subjected to tariff increase, are not affected. However, a survey of electricity consumers across the different DisCos by PowerUpNG, an Electricity Consumer Right Advocacy Organisation this month, found that many customers were still being charged based on the SRT. Yet, some customers say they saw a reduction in their tariff rate. “Power supply drastically improved in my area when electricity tariff was hike to the service reflective tariff. Alas, labour union went into that devilish agreement with the government, I don’t know in whose interest,” complained Khaleel Abah, a customer to NERC through his Twitter handle. The tariff situation remains unclear.“WeareexpectingNERC torollouttheextensionOrderany time from Friday,” said Chuks Nwani, an energy lawyer. Ene Ejeh, an engineer who heads market operator in the Transmission Company of Nigeria(TCN),reactingtothedevelopment,toldBusinessDaythatthere had been ongoing discussions in the Central Bank to deepen a credible electricity market with special focus on appropriate performance-driven cost. “There is a move the Central Bank is driving on the appropriate performancedriven cost and a lot of meetings are being held in that regard with all key stakeholders in the electricity power sector reform to fine-tune that process in accordance with all the necessary dynamics and parameters,” Ejeh said.
Insecurity undermining Nigeria’s economy, FDI, others – Buhari Tony Ailemen, Abuja
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espite the huge investment in fight against insurgency, President Muhammadu Buhari onWednesdaysaidsecuritythreats had continued to undermine Nigeria’seconomyinseveralareas, including trade, investments, education, health as well as agriculture and frequently denied Nigerians the freedom of movement. Worst hit is foreign direct investment (FDI) inflows, which according to the United Nations Conference on Trade and Development (UNCTAD), had fallen from an average of $5.3 billion annually from 2005-2007, to less than $3.3 billion from 2015-2019, a period that has been marked by heightened and widespread insecurity in Nigeria. Statistics show that Nigeria, between 2008 and 2019 budgeted a total of $21.911 billion
to wage war against the Boko Haram insurgents and other forms of criminalities. Buhari, while launching the 2021 Armed Forces Remembrance Day (AFRD) Emblem and Appeal Fund, said the occasion should remind Nigerians of the need to guard jealously the unity of the nation won at great cost. He appealed to Nigerians to desist from actions and comments that could jeopardise the unity and progress of the nation, even as he stressed that ‘‘Nigeria’s strength lies in her diversity.” In honour of the memory of the nation’s fallen heroes and veterans, the president announced a donation of N10 million to the Nigerian Legion, recounting their sacrifices during the First and Second World Wars, the Nigerian Civil War and Peace Support Operations around the world. www.businessday.ng
L-R: Ibrahim Gambari, chief of staff to the President; Boss Mustapha, Secretary to the Government of the Federation, and Folashade Yemi-Esan, head of civil service of the Federation, during the Federal Executive Council meeting at the Presidential Villa in Abuja, yesterday. NAN
US halts crowning of Okonjo-Iweala... Continued from page 1
poned its announcement of the new director-general until a further meeting, which is now scheduled for November 9, after the US presidential elections. According to reports from Geneva, just before the announcement Wednesday,
the United States representative at the WTO took to the floor to insist that South Korea’s candidate remained a contender, and that Washington will not recognise Okonjo-Iweala as the consensus candidate for appointment as director-general. She will be the first woman, and the first African,
MTN Nigeria’s revenue jumps 13.9% in... Continued from page 30
increased to N654.5 billion, up by 4.2 percent from the N628.3 billion reported the same period last year. Data revenue also increased by 57 percent to N241.6 billion while revenue from its digital and fintech businesses both increased by 114.3 percent and 28.3 percent to N6.7 billion and N32 billion, respectively. MTN explained that the increase in digital revenue was driven by increased uptake of its enhanced digital offerings, supported by its over active base of 1.5 million users and partnerships with digital content providers. However, while it saw increased revenue in the aforementioned businesses, revenue from other services dipped 13.1 percent to N36.8 billion compared to the N44.4 billion generated a year ago. Expenses also climbed 19.5 percent from N400.1 billion to N477.96 billion, causing a 2.3-percentage point drop in earnings before
interest, taxes, depreciation and amortisation (EBITDA) margin from 53.3 percent to 51 percent. Its net finance cost for the period grew 32.9 percent to N95 billion from N71.8 billion in the nine months period, 2019, dragging down the increased growth recorded in its topline. Pre-tax profit fell marginally by 0.6 percent to N211.6 billion from N212.9 billion reported last year. This was caused largely by the almost 33 percent increase in finance cost. Similarly, profit after tax (PAT) fell by 3.3 percent, settling at N144.3 billion. Commenting on the result, MTN Nigeria CEO, Ferdi Moolman, said the year 2020 had been a challenging one with the pandemic that started in the first quarter as well as the societal unrest across the country. “During the period under review, we saw volatility in both voice and data revenue, affecting the trajectory of our overall service revenue,
FG cautioned against takeover of non... Continued from page 30
manpower to manage the aviation security arm, the states can manage even this aspect, according to the CAA rules. He noted that another reason the Federal Government may take over states’ airports could be because the states may be insolvent and could go into a deal with the Federal Government to manage, run, complete and develop on their behalf. “Building is one aspect, hav-
ing capacity to run the airports including capital is another aspect, and lastly to make it commercially viable,” he stated. Adewale suggested that airports could be made viable if they are concessioned to a highly skilled group of professional investors: they would create value, bring additional capital, manage professionally, and create wealth for the investors. John Ojikutu, a member of aviation industry think-tank group, Aviation Round Table
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to lead the institution. But there was an unexpected glitch in the process. However, the US move is coming two day after an EU official on Monday said the European Union was backing Okonjo-Iweala to head the WTO, as a signal of trust in Africa. The EU’s support for Okonjo-Iweala is considered a strong signal to reinforce
the multilateral order and a sign of mutual trust between the bloc and Africa, the official said. Okonjo-Iweala, 66, a previous Nigerian foreign minister, is an economist and development specialist serving as board chair of global vaccine alliance Gavi. She wants the WTO to help poorer countries access Covid-19 drugs and vaccines.
as well as pressure on costs, which continues to impact our operating margins, dampening profitability,” he said However, despite the ups and downs, he explained that the firm had continued to recognise it must keep rising the best way it has to do, which is by staying together. “That is why our priorities have remained focused on continuing to provide and invest in a network that brings people together and provides a platform for everyone’s voice to be heard. It also enables the accelerated need for digitalisation where more people work from home with increasing reliance on an ubiquitous and effective digital network,” he said. According to Moolman, the firm, as part of the Covid-19 response, launched various initiatives to provide support for its people, customers and the various levels of government. “We were pleased that over 75 percent of our customers benefited from the free SMS under our Y’ello hope package aimed mainly at
the vulnerable in the society. This initiative enabled our customers to send over 4.3 billion messages and stay connected to family and friends in the midst of social distancing imperatives, mindful that all hands must be on deck to stem the pandemic. When we deployed our Wear-it- forme campaign, we leveraged the power of community and the family ties that bind us, to help create awareness around wearing masks, again as part of Y’ello Hope,” he said. Going forward, MTN said it would continue to build on its financial and operational resilience and execute on its strategy to position the business for sustained growth over the medium and long term. It said also that in the remaining quarter of the year, it would build on the momentum from Q3 to further expand 4G coverage and broaden rural connectivity. “This will be backed by its revamped acquisition offers, which will help to boost subscriber acquisition as well as support the continued growth in voice and data revenue.
(ART), and chief executive of Centurion Securities, told BusinessDay that it does not make any economic sense to build any more airports when the government is planning to concession the ones it owns. This perspective follows suggestions by some aviation stakeholders that the Federal Government could build more airports of its own instead of taking over the management of unviable state-owned airports. “These are airports where their earnings cannot sustain
their operations and maintenance. Owning the old and new states’ airports as national assets for national security makes sense to me but building from fringe financial resources makes no sense,” Ojikutu said. “Only Lagos and Abuja are viable; both contribute more than 70 percent of the national passengers and air traffic and contribute over 70 percent in commercial aviation earnings, yet they are slated for concession because their earnings cannot sustain them and the remaining airports,” he said.
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industry Insight
BUSINESS DAY Thursday 29 October 2020 www.businessday.ng
When a bank puts SMEs first
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ast week will go down as one of the most challenging weeks, if not the most challenging, Nigeria has faced in 2020. What started out weeks before as very wellorganised peaceful protests by young Nigerians campaigning to #EndSARS, was supplanted by hoodlums engaging in wanton looting, arson and destruction of public and private properties across many states at an unprecedented scale. By the end of the week, many lives had been lost, many properties and businesses completely destroyed and Nigeria has been left reeling from a shock that dwarfs any the country felt even at the peak of the COVID-19 outbreak. In keeping with the Nigerian spirit of being one’s brother’s keeper, equally unprecedented efforts by individuals, groups and corporate organisations to try to provide assistance for people and businesses affected by the crises of the past week, have followed. Individuals and groups have announced donations of cash and materials, set up helplines to offer psychological counselling and support, and started online crowd-funding efforts in support of victims. Among corporate organisations, we have seen banks take a leading role. Some banks, such as Access Bank and Stanbic IBTC, have announced funds or desks they have set up to receive requests from, and process assistance for, affected individuals and businesses. One of these banks’ efforts include pledged interest-free loans and grants that affected businesses and individuals can access. Another bank has seen thousands of requests for assistance pour in through the online channel it set up for the purpose. The requests have flowed in, not only because of the victims’ desperation for help, but also because of the humane approach to banking that this institution adopts. Always putting the customer at the heart of its business, FirstBank has been showing empathy with all those who have experienced one loss or the other as a result of the crises. Since last week, the bank has been seeking every opportunity to identify with people who are currently grieving and hurting. Although the largest and most prominent member of Nigeria’s leading financial powerhouse, the FBNHoldings Group that is a one-stop shop for financial services ranging from commercial and investment banking to financial advisory, insurance brokerage and pensions custodianship, FirstBank is neither immune nor removed from the challenges people face. It is a
Adesola Adeduntan, CEO, First Bank of Nigeria
human institution with thousands of humans working as employees to provide bespoke banking products and services to millions of other humans whose pulse the bank feels through its employees. Being part of a group with expertise across the broad spectrum of financial services, makes FirstBank the banking partner with the broadest shoulders to assist SMEs buffeted by the wave of violence witnessed across the nation last week. Given the interconnectivity between Nigeria and FirstBank’s history, it is no surprise that a tumultuous week in Nigeria is giving way to one with stories of hope and optimism by Nigerians badly affected by the crises of the past week, who are looking to FirstBank for assistance. These
Nigerians have been encouraged by the strides FirstBank has made over the years in the SME space as the bank of first choice for small businesses. Built around seven strategic pillars – of connect to infrastructure, connect to talent, capacity building, policy and regulation, connect to resources, connect to market as well as connect to finance – considered essential for the sustainability and growth of SMEs and intended to promote a healthy business interaction and adaptability of the SMEs with their immediate environment, FirstBank’s involvement with SMEs, through SMEConnect (the bank’s branded bouquet of empowerment initiatives, products and services tailor-made for SMEs), has been one that has
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Given the interconnectivity between Nigeria and FirstBank’s history, it is no surprise that a tumultuous week in Nigeria is giving way to one with stories of hope and optimism by Nigerians badly affected by the crises of the past week, who are looking to FirstBank for assistance
sought to facilitate their growth into future economic powerhouses playing ever-increasing roles in Nigeria’s economic development. Since its maiden SME National Conference in 2014, FirstBank has annually engaged small businesses and SME owners in series of empowerment seminars and workshops designed to improve their business capacity. Only this year, FirstBank held its inaugural SME Business Clinic in Lagos, Port Harcourt and Abuja with many SMEs in attendance. The SME Business Clinic featured Abayomi Adewumi, CEO of the Global Leadership Institute and an industry expert and business growth consultant with vast experience working with SMEs. He engaged participants on the FirstBank SME diagnostic tool designed for SMEs to check the health of their business, better understand it and drive profitability. In 2019, FirstBank organised a weeklong SME event which had owners of SMEs in different sectors mentored across multiple states in the country. It was the first of its kind in the industry. Organised in partnership with SME Traction, a leading business coaching platform, it was aimed at empowering SMEs to make informed choices about their businesses, thereby facilitating growth and bolstering their contribution to the development of the economy. At the event, FirstBank’s Deputy Managing Director, Gbenga Shobo, underlined the importance the bank attaches to SMEs. He said: “At FirstBank, we recognise the impact SMEs have in promoting growth of the economy and are excited at the opportunity to continue to enable them prosper by strategically contributing to the sustainability of their business. We remain the trusted financial partner of SMEs and reiterate our resolve to be known as the brand that enables their success; much the same way that we have for over 125 years enabled Nigerians and the economy at large.” This same point was elaborated at another FirstBank SME event, “Food Souk”, convened in 2019 in partnership with Eventful Limited, an events management firm, where the bank restated its commitment to the Federal Government’s diversification drive, promising to continue to support the agricultural value chain from production to consumption to create opportunities for SMEs in the food sector so they could in turn create job opportunities. The bank also extended its hand of partnership to all small businesses involved in organising different trade fairs and exhibitions. A food vendor at the event, Ms Ijeoma Ebeneme,
the Chief Executive Officer, JEM N Iris, commended FirstBank for putting the event together. Ebeneme said she was at the food fair to make profit, meet new clients as well as create the needed publicity for her brand. It is for people like Ebeneme that FirstBank maintains an SME website (https://smeconnect. firstbanknigeria.com) with rich resources to help SMEs build capacity and improve how they run their business. On the website is a blog featuring business articles and tips, SME business toolkit, SME products, Microsoft 365 Business Basic and a whole lot more. In support of owners of SMEs operating in the education sector, FirstBank, in partnership with the Lagos State Employment Trust Fund (LSETF), set up a matching fund scheme of N5 billion LSETF-FirstEdu Loan. Officially launched in September by Governor Babajide Sanwo-Olu of Lagos State and Dr Adesola Adeduntan, Managing Director/CEO of FirstBank, the scheme aims to cushion the impact of Covid-19 pandemic on low-cost private schools by ensuring lending at an attractive interest rate. Speaking at the launch, Dr Adeduntan said: “At FirstBank we recognise the indelible role played by the education sector in the growth of any economy and this underscores our partnership with Lagos State Government for continuous development of the education services in Lagos State and the nation as a whole. The commitment by the Lagos State Government – including this partnership – to enable schools is quite commendable as this will mitigate the challenges caused by the lockdown on the education sector following the COVID-19 pandemic.” It is for efforts like all those highlighted above and many more that the 2019 edition of KPMG’s Annual Banking Industry customer Satisfaction Survey named FirstBank as the biggest mover in the SME space. The 2014 edition of the Survey had named the bank as the most popular bank among MSMEs for both deposit transactions and credit/loan facilities with 26 per cent of the SMEs surveyed identifying the bank as one where they had an ongoing loan facility or had obtained one in the recent past. It is also for the same reason that the unfortunate events of the last week have reignited the bond between Nigerians and FirstBank, a partner that they can bank on in times of need. The bank’s track record leaves no one in any doubt of its unwavering commitment to continue to weather all storms with Nigeria and Nigerian SMEs with whom it shares a common destiny.
Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08033225506. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Patrick Atuanya. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.