Nigeria’s Financial & Business Newspaper JSE dwarfs Nigerian Stock Exchange Monday, August 24 - Sunday, August 30, 2020 www.businessamlive.com 29 times, nears $1trn market cap MOSES OBAJEMU Exchange. rocco has a market capitalisation With a market capitalisation of of $52,084,378,318; the Egyptian ESPITE THE $34,509,132,315, the Nigerian Stock Stock Exchange ($36,078,945,194); SIZE OF THE Exchange is a distant fifth position, NSE ($34,509,132,315); and Nigerian trailing the Johannesburg Stock the Botswana Stock Exchange economy and Exchange, the Namibian Stock ($33,074,974,539). over a decade’s Exchange, the Casablanca Stock Others are the Nairobi Stock longD target by at least two Exchange and the Egyptian Stock Exchange with a market capitalisa- successive leaderships to Exchange in that order. tion of $18,902,672,283, followed business More curious is the fact that by the Ghana Stock Exchange raise market capitalisation to the $1trillion mark, the the Namibian Stock Exchange with a market capitalisation of Nigerian Stock Exchange comes second and has a market $10,294,461,397. The Bours de Tu- is not in the bracket of the capitalisation of $130,296,514,807. nis has a market capitalisation of top four stock exchanges in Namibia has a population of less $8,249,978,765. Africa. than 10 million people. The Namib- The South African economy is The Johannesbourg Stock ian bourse is four times bigger than touted as the most industrialised Exchange, the largest, with a the NSE. on the African continent, boasting total market capitalisation of Data from the African Stock of several thriving manufacturing, $988, 338,750,248, is 29 times Exchanges showed that the Casa- a.m.TOWARDS MORE EFFICIENT MARKETS bigger than the Nigeria Stock blanca Stock Exchange in Mo- Page 4 Power DisCos rip-off electricity consumers amid Covid-19 pains Summary Turn post-paid, unmetered customers to cash-cow What next for Nigeria, W/Africa Africa, a continent of 55 countries that can Calls mount to break DisCos’ monopoly boast of over $2.6 trillion in combined GDP, and having 54 countries signing up to the African Continental Free Trade Agreement Politically, militarily exposed persons own DisCos (AfCFTA) and just 33 of them ratifying ... Opposed Fashola who managed to bring in MAPs Page 5 PHILLIP ISAKPA country by turning the proverbial sword on owned entity or in their current state as FINANCE & INVESTMENT them through a barrage of estimated bills private sector controlled entities, have NIGERIA’S MONOPOLISTIC, YET un- for power which majority of them say they hidden under the veil of unavailability of Why banks reduce int’l spending controllable, but powerfully-connected did not consume. pay-as-you-consume electricity meters to The most important thing to note is that electricity distribution companies (DisCos) For decades, power companies, whether unleash unwarranted charges on hapless Nigeria’s foreign exchange reserve is low are piling misery on consumers across the in the old guise of being a fully government- Page 2 and banks are not spared the effects of the low circulation of forex. It now looks like the banks themselves are now making a shift towards managing their... Page 11 INSURANCE BUSINESS 2.033bn new insurance shares CONSOLIDATED HALLMARK INSUR- ANCE PLC plans to raise additional funds from the capital market, the company has disclosed in a public statement it made avail- able on the matter. In a statement signed by... Page 14 TECHNOLOGY & INNOVATION N710bn ATM investment deficit IN THE FINANCIAL INCLUSION report of the Central Bank of Nigeria (CBN), the deployment of automated teller machines (ATMs) across the country had been identi- fied as imperative to giving people access to cash anywhere for financial... Page 30

R-L: Godwin Obaseki, candidate of the PDP and governor of Edo State; HRH Anthony Ehizojie Abumere II, Onogie of Ekpoma; and Philip COMPANY & BUSINESS Shaibu, deputy governor of Edo State, during a courtesy visit to the traditional ruler in Esan West Local Government Area of the state at the weekend ITMB accesses N2.7bn facility THE DEVELOPMENT BANK OF NIGERIA (DBN) has disbursed the sum of N2.7 billion MONDAY INTERVIEW EXECUTIVE KNOWLEDGE SERIES on-lending facility to Infinity Trust Bortgage How to Become a Star in a Strange Land Bank. ICT is new oil. Govt should bring up policies The facility, according to the mortgage bank, MY NAME IS MUYIWA ABDUL-RAZAQ IT HELPS IF YOU’RE A GENERALIST with is in line with the bank’s vision of... OGUNGBOYE, managing director and no ego. founder of eStream Networks. eStream was In 1991, a Beijing actor named Li Lianjie Page 22 founded 15 years ago by myself and a senior was given the starring role in a marquee Hong friend of mine. We started out as a satellite Kong film. Once Upon a Time in China, a bi- For subscription call: communication company providing the tra- opic of a legendary Chinese kung fu master, 07039371360 ditional V-SAT, specifically to... ushered in a golden age of kung fu movies in Page 26 Hong Kong, then the... Page 15 N250 News: 2 & 4 Comment: 6 Finance & Investment: 10 Technology: 26 Company & Business: 25 No 133 BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 2 NEWS Power DisCos rip-off... Page 1 individuals, households and busi- ness entities. Now, amid the coronavirus pandemic when many small and medium scale businesses are forced to close down their places of operations, it has come to light that across Lagos, controlled by Ikeja Electrics and Eko Elec- tricity Distribution Company, an avalanche of complaints is spreading across the state, com- ing from small business owners who feel hard done by that they have continued to receive outra- geous estimated bills even when they had their business premises locked as they observed Covid-19 lockdown. “I went to check on the prem- ises I operate from, to just see the state of things, only to find that Ikeja Electric brought an estimat- ed monthly bill of over N12,000 for a period that the place had been under lock,” said Kerechi Nkere, who runs a bar that lockdown Governor Babajide Sanwo-Olu (3rd right) of Lagos State; Obafemi Hamzat (2nd left), deputy governor; Solape Hammond (left), special adviser to forced her to close for over three the governor on SDG & Lagos Global; Hakeem Fahm (2nd right), commissioner, Ministry of Science and Technology; and Olatubosun Alake (right), months. special adviser to the governor on innovation and technology, in a group photograph with grant beneficiaries at the Lagos State Science Research Across the country the story is and Innovation Council (LASRIC) grant award ceremony, recently. not different. Our correspondents in Owerri, Port Harcourt, Jos, Abuja Kano, relay tales of woes by non-metered consumers who say they feel punished by the lack of transparency in the business COVID-19 pressures cost Volkswagen, Ford, Toyota, conducted by DisCos, who seem determined to cheat them out GM, Daimler $63bn market cap in 8 months of pocket through what has now become a weapon – estimated Charles Abuede Motor Corp lost a combined $33.1 On the other hand, Toyota Mo- During the second quarter of the billing. billion in market capitalisation tor Corp, the second-largest motor year, Daimler’s auto total sales by But analysts say the problem is THE WORLD’S Volkswagen, the world’s largest manufacturer in the world, lost unit fell by 34 per cent to 541,000 automaker, managed to reduce the $15.4 billion in market cap to the passenger cars and commercial ve- much deeper than just the DisCos NEWS TOP FIVE AUTOMO- wanting to cheat consumers. They BILE manufacturing effects brought about by the coro- COVID-19 pandemic, falling from hicles with the company witnessing say it is systemic and that the Dis- companies, Volkswa- navirus crisis during the first six $196.9 billion as at December 2019 a drop in revenue by 29 per cent to Cos are latching on the monopoly gen Group, Ford Mo- months of 2020, but the financial to $181.5 billion eight months later. €30.2 billion at the end of June. they enjoy and the support of their tors, Toyota Motor Corporation, report of the group shows that sales The company’s financials show In a similar development, the powerful political and military ex- Daimler AG and General Motors revenue fell by 23.2 per cent since that the firm recorded the small- total market capitalisation of Ford posed owners to deal a bad hand saw $63 billion peel off their total January to reach €96.1 billion at est quarterly profit in nine years and General Motors, the two lead- to hapless consumers. market capitalisation between De- the end of June, this year. Until the as the pandemic halved its global ing U.S. manufacturers on the list, A financial expert who has cember 2019 and the third week of close of the second quarter, Volk- car sales. By the end of the second declined by $20.8 billion since the been involved in the power sec- August, 2020 as a result of mount- swagen also reported a significant quarter, Toyota’s operating profit outbreak of the COVID-19. Accord- tor told Business A.M. that the ing pressures from the coronavirus year-on-year decline in its deliver- plunged by 98 per cent to $131.73 ing to statistics, Ford’s market cap matter is beyond the simple fight (COVID-19) pandemic, an analysis ies by 27.4 per cent to 3.9 million million. plunged by $10.4 billion in eight between a service provider and a of their stock performances has vehicles. months from $37.9 billion as at consumer. shown. Volkswagen’s market cap stood Daimler, Ford and General the end of 2019 to $27.5 billion in He said that well over six years From a total market cap of at $87.6 billion by the end of 2019 Motors lost $29.9 billion in com- August. after the companies were sold, $426.5 billion in December 2019, with the figure falling by $17.7 bil- bined market cap Although Ford was struggling in the country is still talking about it plunged to $363.5 billion in lion to $69.9 billion in August 2020, Daimler AG, the world’s third- the midst of an $11 billion restruc- having DisCos supply meters to the third week of August, official according to Yahoo Finance, largest vehicle manufacturer also turing plan to control and roll out customers to guide their con- buyshares statistics access by Busi- Frank Witter, a member of Volk- saw a staggering drop in its market new vehicles, before the emergence sumption of electricity, describing ness A.M. revealed. swagen Group’s management capitalisation by as much as $9.1 of the pandemic, which forced the it as shameful. The COVID-19 pandemic has board in charge of Finance and billion in the midst of the corona- firm to close US factories for more “Post-paid customers and cus- severely impacted the global au- IT, said: “The first half of 2020 was virus crisis. Statistics accessed by than seven weeks during Q2’2020, tomers without meters are the tomotive industry, placing intense one of the most challenging in the Business A.M. show that within it, however, reported a $1.12 billion cash cow for the DisCos,” the pressure on a market which already history of our company due to the eight months, the automaker’s net profit in Q2 amidst the virus. financial analyst said, suggesting was coping with a downshift in Covid-19 pandemic. Thanks to the market cap fell from $52.8 billion General Motors, the fifth largest strongly that the attempt to deny global demand for automobiles, great team effort, we have gradually as at December 2019 to $43.7 automaker in the world, on the oth- meters to customers is deliberate. and resulting in a sharp supply been able to ramp up operations billion in August. The European er hand, lost $10.4 billion in market “That’s why they are refusing to chain disruptions and factory or within the group and up until now, vehicle manufacturing giant also cap to the virus in eight months, issue prepaid meters despite cus- business closures. have steadily managed to navi- reported a substantial loss during as the automaker witnessed a fall tomers having deposited money gate through this unprecedented Q2’2020 due to sharp fall in sales from $51.2 billion to $40.8 billion for same,” he further explained. Volkswagen Group and Toyota crisis.” on the grounds of the coronavirus between December 2019 and Au- Business A.M. learnt that the pandemic. gust, the statistics revealed. DisCos collect prepaid meter fees and spend no fewer than One dilemma in the power sec- date, thereafter determine the new investors. “If the DisCos are ters. You cannot transfer meters six months running rings round tor right now is the fact that most level of investment brought in broken to smaller units using state without their approval,” said the customers without supplying of the DisCos are owing banks, by the investors. Once they have boundaries, it will be cheaper industry source. them with them, having deposited which indirectly would mean the done this, other private investors to buy and manage,” the power But the strong argument being money in their accounts which bank own them should they fore- can be invited since government financial analyst said. made for their break up is tied to they then trade with; yet rub salt to close on their loans. “However, if owns 40 percent already,” ex- For many power consumers what has been established about their injury by continuing to serve government takes over without plained the analyst. the failure by the DisCos to issue the current investors not having them estimated bills. payment, it may cause systemic The problem of the DisCos is them with meters, sometime after capacity. “And that is why they “The Meter Escrow Account is problem in the banking sector,” also been linked to government, depositing money for more than need to break up the DisCos to also making money for them,” one a point which many say is one of which still owns 40 percent equity six months is a crime for which bring in more investors. Nigeria’s person familiar with the situation the reasons government has not in all of them. Sources within the punishment should be meted out electricity market is huge. tells Business A.M. even as he dropped the hammer. DisCos say that government has to the DisCos. But that may not “Discos can be broken to one called for the monopoly enjoyed There is the suggestion, how- not been funding its 40% stake happen that easily because the per state, 2 for Lagos and 1 in by DisCos to be broken up. ever, that government should do across the 10 DisCos while the DisCos are connected to powerful Abuja making it 38. So each state He said breaking up the DisCos an audit, a position some char- 11th Disco (Yola) is 100% own politicians and military people, government can work with their and making them smaller will tered economists have argued by it. one industry source told Busi- DisCo. Presently, some DisCos provide a lasting solution to some against. But they say if government ness A.M. cover five states,” the analyst said of their shenanigans and bring “Government needs to do an can’t fund its stake then it is time “Ordinarily the meter should in pushing for a breaking up of justice to power consumers. audit of the Discos from 2013 to to break them up and bring in be free because DisCos own me- the DisCos. BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 ADVERTISEMENT 3 BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 4 NEWS JSE dwarfs Nigerian... Page 1 Empower NSC as regulator, says maritime experts, trading and service industries. Besides, most venture capitalists amid foreign surcharge on Nigerian importers and foreign institutional investors see the South African economy as developed with a stable political ecutive secretary and chief ex- structure than the rest of the con- ecutive officer of Nigerian Shippers tinent where policy consistency Council, has described the charges is rare. as economic sabotage, and that However, the South African the council was moving strongly economy in recent times has faced against the action of the shipping much crisis and is projected to con- firms. He said information avail- tract by about eight percent in 2020 able to the council indicates that due to slow reforms, power crisis, the new charges applied only to Ni- and the coronavirus pandemic geria, leaving out Benin Republic, The government started a Togo, and Ghana, all West African phased re-opening of the economy neighbours. on May 1 and restrictions were Bello said there was no notice to eased further to so-called level 2 the Shippers Council and the ship- recently. However, business clo- pers association that the charge was sures and job losses due to the imminent. “From our intelligence, lockdown that shuttered much of these charges are over $1,000. It the economy, as well as blackouts is discriminatory. It is insensitive. imposed by state-owned utility Just when the Nigerian economy Eskom Holdings SOC Ltd. from is recovering a little bit from the July, threaten output. The state effect of COVID-19, it is insensitive still lacks a clear plan to revive the for anybody to slam such charges economy and reforms such as the of over $1,000 on Nigeria’s trade,” sale of spectrum and easing visa Bello said. He described the sur- regulations have stalled charge as discriminatory because it is not happening in Togo, Benin L-R: Muftau Oyegunle,non-executive director, Prestige Assurance Plc; Diekola Onaolapo,chief executive officer, or Ghana, querying why it should Ezcellon Capital; Sarbeswar Sahoo, managing director; Raja Vadlamudi, executive director, technical, during an apply only in Nigeria. Governor San- investors/shareholders’ forum of the company on the ongoing rights issue held in Lagos recently Jonathan Nichol, chairman of wo-Olu refuels Shippers Association, Lagos State chapter, has bemoaned the ship- Lagos digi- ping costs. He expressed the associ- NSC calls combined frontal fight against charges ation’s preparedness to take things tal economy, Ben Eguzozie, in Port Harcourt ciled, should join forces to demand surcharge on cargoes imported up with the appropriate agencies. for reversal of the new charges, in from across the world into the He said the surcharge could be AMID A VEXA- order to protect all Nigerian ship- country, imposed on them by the linked to congestion at Lagos ports, smart city pers and other port users.” international shipping firms. The but was uncalled for, considering NEWS TIOUS INTRODUC- drive with fresh TION of arbitrary He said it was time the NSC surcharge adds to the high cost of the negative effects of COVID-19. surcharges by some stood up to the international ship- doing business in Nigerian ports, “We will certainly induce discus- international ship- ping firms in the country, as a cred- tied to the challenges of infrastruc- sions on this with the Shippers N100m grant ping firms on Nigerian importers, ible maritime regulator, by writing ture deficiency and cumbersome Council,” Nichol said, insisting that business a.m. some maritime experts at the to their home offices to always shipping process at the nation’s there was need to review the costs Nigerian Shippers Association inform it (NSC) before introducing gateway. of shipping in Nigeria. “Importers hardly make profit due to excessive Governor Baba- (NSA), Rivers–Bayelsa chapters, any unilateral charges. “The Ship- Since last December, Hapag- charges,” he said. jide Sanwo-Olu, who have advised the Nigerian federal pers Council should ensure that all Lloyd, German container shipping NEWS Bello informed that the NSC appears driven by his government to urgently empower foreign shipping firms operating company, introduced a “revised has written a strong letter to the pursuit of a develop- the Shippers Council (NSC), being in the country consult with them peak season surcharge (PSS) on Tin Shipping Association of Nigeria, mental agenda an- the country’s maritime regulator, to (NSC) before taking any charges in Can Island and Apapa ports in La- including their principals over- chored on turning the state into a 21st protect all shippers. Nigeria,” he said. gos. The PSS applies to all container seas, because it is not a local century digital economy and smart “By empowering NSC, what we Reports said foreign shipping types from across the world to Tin charge. city, oiled the wheel of this pursuit mean is that the federal Ministry firms operating in the country: Can Island and Apapa ports. Hapag “Why should Nigeria be the recently with the award of N100 of Transportation should join CMA, CGM and Hapag-Lloyd Lloyd, according to its notice, is recovery ground for shipping com- million worth of innovation grants hands with the Shippers Council, had late last year slammed $1,025 imposing the surcharge till further panies? We have three lines of to start-ups and science research and issue a strong statement to all surcharge on 20 feet (ft) and 40ft notice. Industries in Nigeria are de- action on the internal level; we are initiatives from various universities shipping firms operating in Nigeria, containers on cargoes coming into crying the new charges, lamenting going to call on the Union of Africa’s in the state. demanding they rescind the sur- Nigeria, from United States and US that the high charges are affecting Shippers’ Council; Global Shippers’ The governor is hoping to deliver charges,” the maritime experts told territories, China, Taiwan, Hong their profits, which have already Association and Global Shippers on six pillars of a development agen- Business A.M. in Port Harcourt. Kong, and Macau. Charges on been badly hit by COVID-19 pan- Forum. On the national level, we da he has set for his administration Ofon Udofia, chairman of the cargoes from the rest of the world demic. are rallying round the organized in the state that is widely regarded as Nigerian Shippers Association are also pegged at $1,025 or EUR For Hapag-Lloyd, the new Nige- private sector, I am already in talks the poster-state for drawing example (NSA) Rivers–Bayelsa chapters, 930. The charges are different from ria surcharge may have contributed with the Lagos Chamber of Com- of political leadership in the country, who captured the stand of shippers the ocean tariffs, bunker-related to drive up its bottom-line for the merce and Industry (LCCI), I will and for which he believes that fuel- in the region, told Business A.M. surcharges, security-related sur- first half of the year. The shipping talk to Manufacturers Association ling technology-driven innovations in an interview that, “the transport charges, terminal handling charg- company closed H1 2020 with a of Nigeria (MAN), as well as big will help transform Lagos into a ministry and the Shippers Council, es, among others, which now shore group profit of $314 million, com- time shippers like Dangote and 21st century digital economy and as federal government agencies up the cost of shipping in Nigeria. pared to $165 million seen in the Nigerian Breweries, among others,” smart city. overseeing the transportation sec- Importers in the country are corresponding period a year earlier. Bello said. Last December when the maiden tor where maritime is also domi- currently grinding under huge Meanwhile, Hassan Bello, ex- edition of the Art of Technology (AOT Lagos 1.0) was held Sanwo-Olu an- Innovation Council (LASRIC), an of N250 million, in demonstration bettering the lives of Lagosians. HealthCare”, “GiVo”, a circular econo- nounced a N250 million grant for agency established with the mandate of our commitment to develop Lagos Sanwo-Olu urged unsuccessful my company that offers recycling so- science and technology-related ideas to facilitate and encourage the devel- into a 21st century digital economy applicants not to lose hope, charg- lutions on IOT devices. On the other and initiatives and it was from the opment of innovative solutions to and Smart City. ing them to re-apply for the grant in hand, research initiatives were made ashes of that announcement that the solve local problems, using cutting- “You are all aware of the the next round of selection, adding up of “Bioprospecting for anti CO- fulfillment had come about through edge technology. It added that the T.H.E.M.E.S agenda of our admin- that the state government would be VID-19 remedies from indigenous this set of N100 million grants. fund is specifically set up to resource istration, which sets out the vision increasing the grant to accommodate medicinal plants” led by Abimbola A statement issued on the award innovation, science and technology for the work that this administration more innovators in the subsequent Sowemimo at The African Centre described the beneficiaries of LAS- ecosystem. has been elected to do on behalf of application. of Excellence for Drug Research; RIC grant as innovating and solving Governor Sanwo-Olu, congratu- the people of Lagos State. The first Olatunbosun Alake, special ad- “Development of Hydrogen Peroxide problems in the area of food security, lating the recipients of the grant, said ‘E’, and the ‘M’ represent ‘Education viser to the governor on innovation Biosensors for Detecting Post Har- manufacturing, health management the initiative aligns with his admin- and Technology’, and ‘Making Lagos and technology, speaking on the vest Deterioration and Preparation and COVID-19 alleviation, adding istration’s vision in turning the state a 21st Century Economy’, the twin transparency of the judging process, of Chitosan-Derived Materials for that they are the first set to be picked into a technology hub and therefore elements that underpin the work of said it was highly competitive and Cassava Shelf-life Elongation” led to benefit from the N250 million urged the recipients to use the grant the Lagos State Research and Innova- that out of hundreds of applica- by Wesley Okiel at the University of seed fund earmarked, last year, as judiciously. tion Council,” he stated. tions, 23 were selected to advance Lagos and “The Production of Forti- Research and Innovation Fund by “In December 2019 seven months He added that science and tech- the cause of innovation and science fied Municipal Solid Waste Derived the state government. into the tenure of this administration, nology remain key enablers to trans- research. Compost (MSW-C) for Amending It further disclosed that the fund we inaugurated the Lagos State form the socio-economic and that Some of the notable innovation Soil to Improve Nutrient Release for the grants is under the care of the Science Research and Innovation his administration was on course beneficiaries were “PricePally” a and Plant Growth” led by Akeem Lagos State Science Research and Council (LASRIC) with a seed fund to delivering good governance and food aggregating platform, “DoCi- Abayomi at UNILAG. BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 AfCFTA SPECIAL 5 SPECIAL FEATURE

dovetail into a single market, the After the commissioning and handing over of the dream of the AfCFTA. What next for Nigeria and AfCFTA office by the president of Ghana to the AU other W/African nations? Nigeria was the first to be ap- proved in 1961 for cross border business and Lagos alone had more than 3000 industries as at then. But now, she has the opportunity of What next for Nigeria taking Africa as a captive market. Also, Ghana getting the secretariat does not mean that Ghana laboured more than others. It was as a result of the foundation laid by Kwame Nk- and West Africa? rumah to Ghana’s independence in Charles Abuede 1957 – The integration of Africa and industrialization of Ghana. Africa, a continent John Isemede, speaking with of 55 countries that Business A.M., highlighted some NEWS can boast of over $2.6 steps to help ameliorate the failing trillion in combined system in Nigeria as well as citing GDP, and having 54 the need to engage experts and countries signing up to the African professionals. Continental Free Trade Agree- “Now that our policies have ment (AfCFTA) and just 33 of them crumbled the system, we won’t give ratifying the signed agreement, what up because we have experts. We becomes next of the West African want to implore the government, sub-region now that the president of because we have experts, professors Ghana, Nana Addo Dankwa Akufo- in Nigeria. In AfCFTA, professors Mohammedu Buhari Mahamadou Issoufou Nana Akufo-Addo have not been engaged. Private Addo has handed over the AfCFTA President of Nigeria ECOWAS Chairman President of Ghana permanent secretariat to the African sectors that ought to be at the back now sit at the edge of the table to Union on Monday, 17 August 2020? not need to sign as people will beg is the second stage of integration in make public the terms of reference, sign papers,” he said. Does it mean that business will not for our participation. America will West Africa”. as there was nothing to be gleaned On the way forward, the trade commence on January 1, 2021, not leave America to other places on what to export outside Nigeria, expert said, the closure of bor- considering the fact that Nigeria, without tying it to trade”. How AfCFTA arrangement instead it is believed that they were ders negates all agreement under the largest economy in Africa, is yet It was when it became obvious came into play? moving from one end of Nigeria to ECOWAS. The closure of the border to ratified the agreement? Though, that Nigeria could not sign the Kigali The AfCFTA started in 1957 when another looking for foreign markets has revealed a contrary reason to the Nigeria is not excluded from busi- agreement that it was taken to Niger. the European Union was also be- from within. government’s claim. An instance is ness activities under the AfCFTA. According to the trade expert, Nige- ing set up with only six members This formed part of what led to the Nigerian naira which traded for John Isemede, a trade expert rians who went there, as a result of at the time. But today, the AfCFTA Nigeria’s refusal to join others in N306 to the dollar before the border and a former director-general of the no national carrier resulting from is the biggest with 54 members at Kigali in March 2018, as it was not a closure but now trades at over N440 Nigerian Association of Chamber the no bilateral air agreement, flew the commencement. However, the tea party, given that some countries during the closure. of Commerce Industry Mines and to Togo, from Togo to Abidjan, then main objectives of the continental were in Rwanda in their national Besides, Nigeria has neither Agriculture (NACCIMA), whose to Mali and finally to Niger. trade agreement is to create a single airlines (Nigerian airlines and NNSL airline nor shipping line, and so interview with Business A.M. are “If I am to take back my job as continental market for goods and were liquidated and export now border closure should be halted. published in the following pages, export manager in any of the com- services, with free movement of uncompetitive). Therefore, we should know the said Nigerian was a systemic im- panies in Nigeria, will I be routing portant country in the world: “First business persons and investments, type of borders we have with our and foremost, we should realize neighbours. If a population of 200 that Nigeria is the hope of the black million cannot manage a border of race and also the landlord of the less than 5000 km, then we should ECOWAS secretariat, which has desist from complaints on ECOWAS been handled for 45 years with no action, he said. achievement recorded. Nigeria has Fundamentally, the capacity the ECOWAS secretariat and Ghana building of personnel, as well as the has the AfCFTA secretariat. If we do building of linkages between the not communicate, cooperate, and universities, the private sector and coordinate activities in the West the government, will be a start off African sub-region, it will be a mi- point to achieving success with the rage,” he said. agreement. For AfCFTA to succeed In terms of Nigeria’s readiness there must be a monitoring and to sign the agreement, Isemede evaluation mechanism. explained that a critical look at Today, Isemede said, the only Nigeria’s position cannot be done way we can still gain the naira is outside of ECOWAS’s protocols on to key into the AfCFTA. Did the the free movement of goods and ser- President just promise 10 million vices, with the agreement they have jobs per year? Well, the only way to on the Free Trade Area (FTA), as well provide the jobs is to build linkages as the Custom Union that they are in agriculture. This is not the ICT, air New AfCFTA Headquarters heading into and a common mar- business or technology. ECOWAS should come together cooperatively ket. According to him the free trade my functions in that way?” Isemede and as the minorities with a full The African Continental Free to be able to compete against the area plus the common external tariff asked. house of government officials not Trade Agreement was designed likes of North Africa, east, central (CET) will give you a custom union, He said Nigeria made a mistake promoting trade. for the economic integration of the and southern Africa. adding that ECOWAS cannot be go- by not using the ECOWAS template, Meanwhile, Nigeria signed in continent, but as Nigeria has not The AfCFTA office is now opened ing into a customs union and we say developed by it, adding that recent Niamey but is yet to confirm her ratified as of July 2020 still shows in Ghana with the whole world Nigeria is not prepared. work must be carried out outside signature to the agreement. On what that the lack of expert committee watching to see how Nigeria and “In Africa, there are 8 economic this country. grounds has Nigeria not put her on it is a major bone in its throat. ECOWAS will navigate establish- blocs, and if narrowed down, we “What led to the delay in signing signature down to become a mem- On the flip side, there is no made ing a Customs Union, which will have 5 – North Africa, East Africa, was the committee set up by the ber of the free trade agreement? As in Nigeria products identified to dovetail into a single market. Nigeria Southern Africa, Central Africa and government, because the commit- experts put it, “it simply is the result engage or compete at the kick-off is at the centre of all the activities West Africa blocs. Within the south- tee comprises of non-business ori- of [having] no export strategy, her of the free trade arrangement. No whether it has signed or not signed ern and eastern African blocs, we ented individuals who have never foreign policy not tied to trade and market research appears to have to the agreement. have COMESA, SADEC and SACU. crossed the borders or ports before lack of trade records”. been carried out by the MDAs as the “We have to put our acts together However, our focus on the AfCFTA and they are neither importers nor Trade experts believe that target markets for made in Nigerian and use the maximum support will be on the area of ECOWAS,” the exporters,” the former NACCIMA while the largest contributor to the products at kick-off. based on the template we used trade expert stressed. boss said. ECOWAS GDP will ratify the agree- According to Isemede, “We are to run the ECOWAS now in the According to him, “North Africa While grappling with the situa- ment, it has work to do fixing certain in a country with foreign policy ECOWAS office, based on our re- to Morocco, Egypt is prepared and tion on ground, ECOWAS remains things, as well as other personal but no foreign policy strategy. Our search, while looking for import and close to the European Union, East the least developed sub-region on services in the frontline, and not foreign policy is not tied to trade. export revolution in all the 16 coun- Africa is prepared and is close to the the continent. This is the time, from the MDAs. If it was tied to trade, our exploits tries, plus Chad and Cameroon,” he Asian block, and Southern Africa is Senegal to Nigeria, we have to work more industrialized. So we need to Another bottleneck that has in Zambia, South Africa, Liberia, emphasised. been identified is the failure to and Sierra Leone; today we would together and be able to achieve the firm up the common market which customs union, which will now BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 6 AfCFTA SPECIAL INTERVIEW Nigeria must pursue comparative advantage trade policy – Isemede What makes international trade so important to any country’s economy? HERE IS NOBODY THAT IS AN ISLAND; any Return to agriculture, solid minerals, petroleum, country that imports virtually everything won’t be involved in import and export. Import is what you bring and export is what you take out, and ICT will make Nigeria world, not just Africa’s giant for you to have a balance of trade and balance ofT payment, you must be involved in international trade, Nigeria, though, yet to sign the African Continental Free Trade Area (AfCFTA) agree- for you to save the naira and have enough money for forex. ment, a common or single market that will encourage unhindered inflow and outflow Now we are not exporting, that is why we are borrowing. of goods and services in African key markets, will need to improve on the challenges In what ways have international trade impacted posi- to export trade as a means to capitalizing on the benefits in the untapped market tively on Nigeria’s economy outside oil and gas export, potentials which the trade agreement offers. A recent report by PricewaterhouseCoo- and during the pre-oil and gas era? Can we have empiri- pers (PwC), revealed some analysts positions on how the free trade arrangement of- cal evidence? What are we doing wrong? fers a huge opportunity for Nigeria’s bourgeoning economy, while highlighting some With empirical evidence before oil: Oil exploration start- of the many challenges responsible for the low level of exports of agricultural goods ed in Nigeria in 1908 and those who came for the explora- tion, the Italians, left in 1914, not because of the amalgama- relative to total exports, which include but not limited to, logistics challenges at the tion but because of the First World War. They came back in ports, inadequate storage facilities, poor products for exports and the low-value ad- 1936 and worked for 20 years to discover oil in Oloibiri in dition to agricultural products. 1956. We started the export in 1958 with 4100 barrels per Following the opening of AfCFTA headquarters in Accra, Ghana last week, Business day and at that period, Nigeria was exporting crude of 4000, which was over 90 per cent; and in 1960, it became 17100 A.M.’s CHARLES ABUEDE met with JOHN ISEMEDE, PhD, a former director-general of barrels, and we were exporting 17000. When we gained in- the Nigerian Association of Chambers of Commerce Industry Mines and Agriculture dependence in 1960, oil was contributing one per cent to (NACCIMA), researcher and an international marketing expert with a demonstrated the GDP. When the military came in 1966, it was contribut- history of working in the international trade and development industry. A national ing 9 per cent to the GDP. Today its revenue is almost 90 per cent. expert on Value Chain with top skill in negotiation, Business Planning, Management, And if we look at OPEC allocation Nigeria, with 200 mil- Risk Management, and Strategic Planning. He is also a strong community and social lion people, we are entitled to two million barrels per day. services professional with a Master of Business Administration (M.B.A.) focused in If we do the mathematics, 100 Nigerians are entitled to one International Business/Trade/Commerce across the globe from Universities of Benin barrel of oil. In Angola, it is 10, based on their population; Algeria is 15 to a barrel; in Kuwait, it is two persons to a bar- and Lagos, Nigeria, Alliance Franchaise and Paris Graduate School of Management, rel. If we look at the exchange rate of today multiplied by the France, where he revealed the mysteries behind Nigeria’s low trade export over time OPEC allocation and the dollar, we can see that the aver- and why the African giant has refused appending her signature to the AfCFTA in Nia- age person in Nigeria today is entitled to N200 per day from mey. Excerpts: there. Prior to that, we were not in this loose grouping, we were in the regions. The University of Ibadan was University College, London until 1962. There was competition; Chief Obafemi Awolowo built the cocoa house, the University of Ife with proceeds from cocoa. The western region was the richest region in the world, as at then. Then, the eastern- ers, Nsukka came up, and Okpara built the Umudike and the palm plantations in the east. Tafawa Balewa and Ahma- du Bello came up with the Ahmadu Bello University, then Mokwa Ranch, and others. Nigeria was a very prosperous country; before indepen- dence it was 25 pence (as was in use then) to $1 USD. In 1973, when Nigeria started using naira and kobo, the naira was devalued by 50 per cent; the essence of that devalua- tion was to promote export, and it became 50 kobo to a dollar and 70 kobo to a British pound. What has happened between that [time and now]? Even in 1986, when structural adjustment programme (SAP) was introduced, we had for- eign reserves of 18 to 24 months. Today, Nigeria is buying the same pound of 70 kobo for N610 and the dollar for N480 as at this morning [Thursday 20, August]. We have a foreign reserve of 35 billion dollars and if we compare what we have with what we have bor- rowed and what we intend to borrow the reality is that the naira will still go down. The only hope for Nigeria is to look at 3 things: Fix our re- fineries because, in the upstream, we are not there, for over 100 years. That’s the exploratory stage. The pipeline, and re- finery, we are not equally there. Where we are very solid for over 200 years is … We started importing, before we discov- ered the exploration of oil and before we had few refineries. Now, we are importing and exporting crude, and importing refined products is like throwing away money because we are exporting wealth out of which they get different variet- ies. Look at cocoa; we are exporting cocoa beans for over 20 years and the biggest cocoa processing plan is located behind the Nigerian embassy in Netherlands. Now, if we are adding value to this, the CBN’s position is that there is no allocation of forex. We are going to block this we are going to block that. If all these interventions are working, why did we not fare better? We still find ourselves where we are. Let us retrace our steps. Look at import sub- stitution, backward integration and let us be producing. As long as we are not producing, we are looking up for pallia- tives, palliatives will lead to dependency and the naira will BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 AfCFTA SPECIAL 7 INTERVIEW

no target is given to them and the government is funding them. So, when we say fair trade or unfair trade, if the Japa- nese can compete because America controls about 25 per But if we now go back to agri- cent of the world trade, followed by China of about 18 per Nigeria must pursue comparative culture, solid minerals, petro- cent. Our own is just 0.0 per cent of the world trade. So WTO leum, ICT, Nigeria will be the is still very relevant in the regulation of world trade. That’s “ why we talk of the rule of origin and trade facilitation.

giant of the world and not just The ACP-EU trading bloc earlier looked like it had advantage trade policy – Isemede Africa. The giant is not by the some promises. But, looking back now, it seems to have

population because our per become just a shadow of its old self. What has gone wrong and is there any hope of the ACP-EU trading bloc return- capita income is one of the ing with strength? Return to agriculture, solid minerals, petroleum, lowest globally, while the mis- “ ACP-EU is under the GSP arrangement that whatever I am giving to you, you are not giving to me. That one came ICT will make Nigeria world, not just Africa’s giant ery index has Nigeria ranking up for 77 Africa and Caribbean countries to export agricul- 5th in the world and the ease tural produce. Even the agricultural produce here, we are not able to meet the standard because we don’t have labo- of doing has not improved ratories and accreditation centres. We are having problems because of the collapse of the commodity boards. Part of the The headquarters of AfCFTA is in Accra, Ghana. Why IMF conditionality was to collapse the commodity board in couldn’t it be in, say, Lagos or Abuja? Has Nigeria played 1986 and by 1988, some of the incentives were given to peo- any remarkable role in the setup? continue to suffer. As I speak with you now, the unemploy- ple in the city who have been last, not the cocoa farmers. It The struggles others have passed through, as Nigeria ment rate is 27 per cent, which has never gotten to this became incentives for cocoa sellers. Those who worked for didn’t sign the AfCFTA neither is the country a full member alarming rate before. seven years will not get an incentive. Those who will now of the agreement, has led to the decision being taken in Nia- buy, put their own margin, will get an incentive. mey to site the headquarter in Ghana as a result of the roles What happens to Nigeria’s trade policy? Where did So when drawn, ACP-EU is the GSP, that the European played by Kwame Nkrumah and J.J Rowlings of Ghana. On we get it wrong? What has trade been adding to Nigeria’s Union lowers the standard for us to enter their markets with the ETLS, we have ECOWAS, Egypt has AFREXIM, Abidjan revenue outside crude oil export? agricultural produce. Why did they not say that we should has ADB, Cotonou has ECOWAS fund, Sierra Leone has the For a country to survive, it must have a foreign policy. add value and bring to them? And when the European WABA, and Guinea has WACH. Nigeria has a foreign policy. The same foreign policy from Union was getting all these from us, that’s how America 1960 till today, which is, Africa is the cornerstone. Nigerian came up with their version called AGOA. Has Nigeria been Nigeria has not been a big beneficiary of the ETLS foreign policy is not tied to trade. America will go to where it able to benefit from one, and then D-8 came up. Eight coun- (ECOWAS Trade Liberalisation Scheme) relative to its will favour them and whatever they do is tied to trade. tries, and for 20 years, Nigeria has been a member under size. Why? What chances has Nigeria in AfCFTA if ETLS Then the last one, we talk of economic diplomacy. So di- them and has not signed one agricultural produce till date. didn’t add so much to its fortune? plomacy is this way: whatever I give to you, you give to me. So, if you see ACP-EU, I know what they are doing. I visited Since Nigeria left, there are no export managers any lon- But when you talk of Nigerian trade policy, the last trade their office in Belgium in 2011 under [Obadiah] Mailafia’s ger. We were the promoters and we benefitted. We have ma- policy we had was in the year 2000, which was submitted in reign as Chief of Staff. AGOA, I know what they are doing. jor companies which can be found at Ijora, Apapa, Oregun, the Doha conference of 2011. The one that was taken to Bali During my time as chief executive of NACCIMA, even the etc. Nigeria was the first country to put $10 million as a com- in 2013 was approved, but it was not taken to the National D-8. But we are not prepared for these things. pensation fund. The compensation fund is when you export Assembly. As I speak with you, Nigeria has had no trade under the ECOWAS ETLS, if the country is not collecting policy for 20 years. Africa depends more on commodities export to coun- duty on your product. Then, you will have to compensate tries outside Africa for its foreign exchange earnings. them (the government of that country). Nigeria was able Given an opportunity to drive trade as a minister, And trade between countries in Africa is lower than with to play that role. If we are not benefitting from the ETLS, it’s what will you do differently to diversify Nigeria’s export outside Africa. Yet the commodities are mostly raw, un- just that people did not continue from where we stopped. base and income from such diversification? refined and earn low because of little or no value-added. Even with the border closure, it is an issue. You can’t carry There is somebody in that seat. But, if I can advise Ni- Is that about to change anytime soon? Are there coordi- cement by air, but through the sea with ship, and land. geria on the direction to go, I will suggest a comparative nated efforts to boost intra-African trade and value ad- advantage. What to do is that God is not a debtor to any- dition to boost revenue and improve Africa’s economy? How should Nigeria promote and implement its eco- body. What he gave to us is different from what he gave to When we started the business of export in West Africa, nomic and trade diversification, especially now that the America or Brazil. In this situation, Costa Rica can export to do business in Europe was three minutes and to do busi- petroleum economy seems to be in its twilight, and - as pineapple to the UK; the beans we are getting in Europe ness in Ghana was six months, while the Benin Republic Coronavirus pandemic has shown - has become unreli- comes from Madagascar, which is 12 hours by flight. Cut was almost a whole year, because there was no bilateral air able trade commodity? flowers from Kenya and Ethiopia. For a 737 Boeing air- agreement. They do not take only our agricultural produce. It is for us to come together – the universities, the private craft to load agricultural produce in Kenya, its 0 per cent it Under the ACP agreement, what they want from us is pro- sector and the government. In the past, it is the private sec- pays to the government; to take agricultural produce from duce and we have not been able to move and add value, tor before the regulator. Now, it is the MDAs before the pri- Ghana it pays $2500; and from Nigeria, it pays $35000. With that’s why I said there are gaps and if there are linkages we vate sector. That’s why things are not working. Even where those payments added to the cost, can one sell? Even at the should be able to find ways to address it. committees are formed, you don’t see the private sector. airport, we see how these things are being weighed at N20 If we look at the African continent, we have about 1.2 bil- You hear of price increase of petroleum products and elec- per kilogramme and nobody to assess these. If we look at lion population. Trade within the African sub-region is less tricity hikes, the private sector doesn’t get the information petroleum, the refineries should work, Ajaokuta Steel Com- than 20 per cent and it is mainly in the east and southern like any other person, which is difficult for planning. pany should work, Iwopin Pulp and Paper Mill should work, Africa. Trade within ECOWAS is about five per cents and if Jebba Paper Mill should work. Then in agriculture, we will we now talk of informal trade, it goes as high as 20 per cent Are there any other insights on the subject of regional now develop the value chain. in the past, but today, it’s less than 12 per cent, because of trade that you feel strongly about for Nigeria to adopt? It is not a matter of supporting farmers without support- the incursion from the Asian countries. The problem we have now is the oil-based economy, and ing processors, because if you give money to farmers and The coordinated effort to boost Intra-African trade is the instead of being the agric-led economy of the past. But if you do not provide the seedlings, you can’t get good yield single market we are working on, that the AfCFTA, AFREX- we now go back to agriculture, solid minerals, petroleum, or good output; if you don’t provide good habitat they will IM and AfDB be up to the task. What is left is for us using the ICT, Nigeria will be the giant of the world and not just Africa. train them [on]. Then, if you don’t process, for instance, rice ECOWAS and our experts to coordinate activities. The giant is not by the population because our per capita which takes only 5 months; maize takes 3 months. The African Continental Free Trade Agreement (AfCFTA) income is one of the lowest globally, while the misery index Then what of the domestic market and export? Some has come into force and the permanent headquarters in has Nigeria ranking 5th in the world and the ease of doing of the things we produce here cannot enter departmental Ghana seems ready for work. Do you think it is fully pre- has not improved. stores. You will see apple from South Africa, banana from pared? Where, in your opinion, are the likely crisis points South Africa. Why is it that our own cannot even enter our and what should be done to prevent or overcome them? own departmental stores? Then the solid minerals, 54 we How much do you think AfCFTA has the potential of adding have discovered, we should be able to add value; human to Nigeria’s economy in the next five years, ten years? Same capital development and diaspora remittances. for Africa’s economy AfCFTA headquarters being cited in Accra Ghana is The World Trade Organisation (WTO) seems to have ready. Ghana to Senegal and Nigeria must key in and drive lost serious relevance in the past couple of years. In par- the same agenda. Otherwise, we will not be able to compete ticular, it seems the big players, such as China, India, the with northern Africa, eastern Africa, and southern Africa. US and Russia don’t play by the WTO’s rules and WTO We should be very grateful we have AfCFTA and ECOWAS. appears helpless about it. An example is the on-going People do not have such opportunities. What we need now China-US trade war. Please, put the issues in perspec- is that there must be communication, coordination among tives. What has gone wrong? If the WTO fails to tackle the West African brothers. The secretary-general of AfCFTA powerful players, do you think it can still continue to be a is very capable; I have read a lot about him. So, we have a force to reckon with in global multilateral trade? lot of professors on the continent; I know the capability of In trade, you will want to claim superiority. It’s like foot- Africa, and I respect our professors. Also, there is no crisis ball, FIFA is there regulating body. WTO, when you say a fair because the rule of origin is there and the rule of compensa- trade a fair trade, we refer to Africa, but have we been fair to tion and competition. In Nigeria, there is no rule on compe- ourselves? A country like Nigeria cannot export yam, beans, tition. But in West Africa, there is. and we have the Oronsaye reports, more than 1000 MDAs, BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 8 COMMENT

Capitalism & Prosperity with Towards Africa’s inclusive NNANYELUGO IKE-MUONSO prosperity creation ecosystem

Professor Ike-Muonso is Managing Director/CEO of Value Fronteira Limited

ROGRESSIVE GOV- ERNMENTS want ev- ery segment of their society to share in gen- erated prosperity. They striveP to increase the number of citizens migrating from a lower to a higher level of well-being. The faster the pace of these up- ward migrations, the better it is for society and economy. Unfor- tunately, that is not the case for the African continent. There are significant economic disparities among diverse groups in many African countries. It is a trend that requires urgent reversal. But the self-rule mentality among many African leaders presents a significant challenge. By deep- ening corruption, the mindset of self-rule tends to perpetuate the disparity. Through the natural capitalistic wealth creation pro- cess, the wealthy wealth own- ers get more prosperous. This prosperity compounding occurs the public. The more efficient it cation, the continent’s severe Combining that with the ‘hand- also explains why we are at our because they have better access is, the more robust the ecosystem governance and the rule of law holding’ framework will lead to current level of socio-economic to more resources relative to the is for inclusive prosperity. How issues have long worked against a large army of the middle class. well-being. Governments in Afri- rest of society. How can Africa has Africa performed on this? its capacity for democratized The handholding framework has ca should adopt and mainstream thus speed up the process of cre- The 2018 Ibrahim index of Afri- prosperity. a reputation for sustained high the dual-track Igbo apprentice- ating economic opportunities for can governance is not cheering at A good starting point for Afri- corporate performance. Through ship system which combines all? all on safety and the rule of law. ca, is to confront the governance a dynamic virtuous process, the some measure of theoretical Let us examine some well- The percentage score on personal issues. Civil society organiza- middle-class will enhance the knowledge with practical work- known cases. A good example safety in the continent is 46.2% tions have the most significant demand and survival of other shop education that guarantees is an insurgency in Nigeria. Al- while transparency and account- role to play in this regard. More businesses. The creation of a ro- immediate employment. The im- beit debatable, Boko Haram’s ability were 35.3%. Only 19 coun- than the rest of society, they car- bust middle class enables African plication of its mainstreaming is insurgency persists because of tries improved between 2008 and ry a latent public trust to confront economies to ease the conditions that uneducated people will be- the severe deprivation in north- 2017. Thirty-three countries de- those who have captured and necessary for societal growth. come fewer. ern Nigeria. The latter orches- teriorated. The 2018 World Bank pocketed the governments for That condition helps in providing Like education, Africa also trates hardship and alarming governance data also shows that their gains. Active civil society a stable consumer base for pro- has the weakest business sup- levels of economic inequality. only the governments of six Afri- machinery that will deliver ex- ductive investments. porting infrastructure. Without It is a region with less than 2% can countries are effective. These pected results will be all-encom- Besides enhancing the pros- adequate public infrastructure, of the population controlling its are Botswana, Cape Verde, Mau- passing. It should accommodate perity of the middle class is fa- the economy will not grow as entire financial resources. Liv- ritius, Namibia, Rwanda, and nongovernmental organizations cilitating the more robust profit- anticipated. Only South Africa, ing side-by-side this ultra-socio- South Africa. The effectiveness focused on governance, legal as- able performance of corporate Mauritius, and to a limited ex- economic category is a horde of index shows how committed a sociations, student associations, organizations. Corporate orga- tent some countries in North vulnerable people. Worse still, government is to raise and sus- labour unions, and academia. nizations wield enormous influ- Africa, Egypt, Tunisia, and Mo- is that not many concrete poli- tain the quality of policy formu- Apart from the perennial gover- ence on society. They are also rocco appear to have some mod- cies and programs are in place to lation and implementation. This nance issues that held the Afri- critical providers of employment est levels of infrastructure for remedy the situation. The chal- indicator also tracks the quality can continent down, there are for the population. Many of them an expanded level of production lenge is how to include these of public services and civil ser- at least two other areas of urgent also conduct beneficial strategic and engagement in international marginalized groups in prosper- vice. Apart from these six coun- focus. CSRs. The prosperous corporate trade. Inclusiveness will also re- ity sharing. Again, there is con- tries, all other African country The first area is the facilitation sector will lead to a burgeon- quire that everyone be part of a cern about the continent’s pros- governments are seemingly in- of the profitability and growth of ing middle class. Through these more extensive financial system. perity transitioning process also effective. This weak governance over 65% of the continent’s cor- roles, it is a vital platform for the Banks will be better in resource wrecking the traditional ways of position also raises concerns porate sector. Implementation of inclusive prosperity ecosystem. mobilization with enhanced life of the African people. It is this about their capacity to guarantee initiatives for the high profitabil- So, governments in Africa must digital financial systems across way of life that has also guaran- the democratization of prosper- ity performance of the corporate strengthen corporate organiza- the continent. Kenya’s example teed their survival over the cen- ity. sector will unleash a prosperous tions’ capacity to innovate and is worth replicating. From 27% turies. Prosperity’s transitioning Apart from South Africa, but middle-class population. This is perform. It is through that pro- of its population in 2006, more process leaves in its wake, lit- including São Tomé, those coun- even more effective when these cess that they can deepen their than 83% of its population lever- ters of culture and value waste. tries are the best in dealing with companies are in industries strategic roles in society. There age the formal financial system. Cultural value destruction also corruption. They are better than with diversified value chains. are at least four elements that The need for generous tax relief crushes the means of subsistence other African countries in exer- In addition to the governance make up the substructure for in an environment with inade- of many in the lower ends of the cising public power for the public architecture, this will require a facilitating the emergence of quate public goods provisioning socio-economic ladder thriving interest. Others seem to harbour robust substructure comprising the middle class. These factors is crucial. Businesses on the con- through it. more officials interested in pri- efficient education and critical strengthen the corporate sec- tinent already bear huge costs Again, the environment for vate gains and other grand forms public goods provisioning, the tor to perform better. These are through the private provision of significant levels of inclusive of corruption. In the same light, inclusive financial system as well [a] education, [b] Public schools’ public goods. These are facilities prosperity is also one in which only eight African countries are as a reduced tax rate. Policymak- provision, [c] inclusive financial that ought to have been in place the observance of the rule of law free from political instability, ers should concern themselves system and, [d] large tax reliefs. through the governments. Many is high. When everyone is sub- terrorism, and violence. These with those policies that drive Education enhances productiv- reliefs in taxes will not only lead ject to the law, the government countries include Botswana, excellent quality of life. Imple- ity and income earning capacity to the survival of more firms but works. The rule thus provides the Cabo Verde, Ghana, Mauritius, menting the modified dual-track of those who get it. Globally, the in the price competitiveness of framework that enables the gov- Namibia, Rwanda, São Tomé and Igbo apprenticeship system African continent has the low- the produced products. ernment to work for the good of Príncipe and Zambia. By impli- will create millions of new jobs. est school enrolment rate. This BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 COMMENT 9 THE TEAM COVID-19 Pandemic: Market entry and EXECUTIVE EDITOR Phillip Isakpa Tel.: 0809 400 0025 the importance to SMEs at this time [email protected] located and operating in Ikeja La- choice is one of the most important market conditions different from CONTENT MANAGER Moses Obajemu gos State can conduct market en- decisions a business has to make the home market. Tel.: 08038484048 try research and gather data from in the effort of new market entry That said, the context of digita- [email protected] other States of the Country (Kano, strategy because it determines the lization has evolved over the last Enugu, Kwara, Osun, Rivers, Nasar- number of resources to be com- years and pushed further commu- PORT HARCOURT BUREAU awa, Taraba) or around the West mitted. Therefore, businesses have nication technologies much easier, Ben Eguzozie Africa region(Republic of Benin, to find an entry mode that allows such as the internet and mobile Tel: 07034888186 [email protected] Togo, Ghana Guinea, Guinea-Bis- them to deal effectively with the telecommunication. Therefore, sau, Liberia, Mali, Mauritania, Ni- risks that arise in the target desti- digitalization can also be lever- JOURNALISTS ger, Senegal ) or beyond for market nation. aged upon when considering the Omobayo Azeez expansion and new market entry There is no one specific mode market entry options. Besides the Charles Abuede strategy. With adequate research to of entry an organization can adopt impact of the COVID19 on busi- guide the decision, businesses can to enter into a new market or go nesses globally has encouraged GRAPHICS achieve increased sales, improved internationally. Businesses can the effective use of technological Christopher Ikosa brand awareness and business sus- consider some of the most com- innovations. Innovation in the con- ______tainability with a new market strat- mon market entry modes, which text of this article can be defined as Businessnewscorp Limited TIMI egy to gain market expansion. are: directly by the setting up of an ‘the introduction of something new OLUBIYI, Ph.D. The new market entry strategy, entity in the new market, directly that positively impacts businesses Phillip Isakpa exporting products to the new mar- and mankind in meaningful and Adedotun Akande Dr. Olubiyi when implemented, can sustain the success of a proactive business ket, indirectly exporting using a re- contextually specific ways. There- Tiamiyu Adio holds a Ph.D. in due to the negative challenges cre- seller or distributor, and producing fore introducing new market entry Isaac Jayeola Entrepreneurship ated by the COVID19. In building products in the target market. The modes to business operations at and Small Business a market entry strategy, time is a most common modes, however, to this time might just be the innova- crucial factor, and consequently, go into a foreign market entry are tive move required to stem the im- OFFICE ADDRESS: Management. in my opinion, the pandemic has licensing, joint venture, partner- pact of the pandemic on business 10B Stella Osholanke Street, Off provided good timing for new mar- ing and strategic alliances, acqui- operations. By so doing, market in- Internationnal Airport Road, Ajao ket entry and the opportunity for sitions, exporting or establishing novativeness, behavioural innova- Estate, Isolo Lagos. companies to expand easily. It is new, wholly-owned subsidiaries, tiveness, and strategic innovative- Tel.: +234 (0)803 5555 568 much easier now for cross-border also known as greenfield ventures. ness would have been achieved. Email: [email protected] expansion or at the least expan- For SMEs, the option is usually to This will greatly improve the per- Website: www.businessamlive.com HE BUSINESS ENVI- sion beyond the geographical loca- start transferring/exporting via an formance, market expansion and RONMENT IS CUR- tion of business operation because agent or a foreign representative. logistics method of businesses. RENTLY going through governments are encouraging and This option is a non-equity mode To have a winning market en- radical changes glob- supporting businesses to stabilize that requires fewer resources and try strategy plan, businesses need ally due to the damag- due to COVID 19 impact. More provides flexibility, but the target to set clear goals, study the target ingT effect of the novel coronavirus so, we are likely to see policy re- market knowledge may be lacking. market and the competition, know (COVID19). Therefore, to cope with sponses to decrease trade barriers Each mode of market entry has the customer needs and prefer- this situation, businesses need to and improve globalization. There- advantages and disadvantages. ence. adjust and develop strategies to fore considering new market entry Firms need to evaluate their op- Extant literature suggests bar- rise to the occasion. A typical deci- strategy at this time is one of the tions to choose the entry mode that riers of entry to new markets, sion businesses’ particularly Small most important ways for business- best suits their strategy and goals. particularly foreign markets to in- Medium Enterprises(SMEs) can es to grow profitability and sustain Significantly, the mode of entry is clude lack of financial, physical or make at the moment to achieve competitive advantage. a crucial factor to be considered technological resources; the lack sustainability, and valuable com- By entering into new markets, for a business entity to be success- of opportunities and insufficiency petitiveness is by considering new businesses, particularly SMEs, can ful in a new market. However, all of managerial skills. Another is market entry strategies. Many firms enjoy several benefits, including the modes of market entry involve the lack of useful information to expand their business geographic broadening their customer base resource commitments of some analyze the target market and also scope from domestic to nationwide and improving market share be- kind. Because entering the market identify business opportunities. or even foreign markets through yond the business location. Con- properly is one of the most impor- It has also been observed that a this means. With the harsh impact sequently, if a domestic business tant steps a business must con- strong brand identity or customer of COVID19 and the limitations in is willing to go nationwide and/or sider. From context observation, loyalty, and high customer switch- financial and human resources, across the globe with world-class business expansion starts with the ing costs can be barriers of entry to companies can still leverage on a products and services, the best op- movement of goods and services new markets. Others include the new market entry strategy to stem tion is through a new market strat- to neighbouring States or countries need for new companies to obtain the tides. egy and the time is now. Invari- that are close to business facilities. proper licenses or regulatory clear- Market entry strategy is a ably these following benefits can This is usually because of the lower ance before the operation. Some of planned distribution and delivery be achieved: economies of scale, transportation costs involved and the risks incurred when entering a method of goods or services to a earning foreign currency, gaining the often greater similarity be- new market and start domestic or new target market. In simple terms, global customers, increasing brand tween geographic neighbours. international trade include weath- a market entry strategy refers to a awareness and improving market To be effective and successful, er risk, foreign exchange risk, and detailed plan of how to successfully share. Further to this, it is important with new market entry strategy, cultural risk berth and run a profitable busi- to state that the ease of entry into a businesses need to support the While the idea of entering a How may you obtain ness in a new region. Market entry new market is characterized by the decision with a well-thought-out new market might seem viable on advice or further strategy will help companies to as- available financial resources, the plan. One that is based on the paper, when put to practice, orga- sess markets’ readiness for new of- ownership structure, managerial analysis of potential competi- nizations are challenged by several information on the ferings and gain detailed insights styles and managerial resources of tors, understanding of the focus uncertainties and barriers afore- article? into the new market. In short, it the domestic businesses. market environment and its inner mentioned. Though some compa- Dr. Timi Olubiyi holds a allows businesses to gather com- However, the relevant factors workings,the regulatory expecta- nies prefer to develop their market Ph.D. in Entrepreneurship prehensive insights into lucrative that must be considered when de- tions, consumer behavior, and pos- entry plans, other outsource to spe- and Small Business opportunities, industry develop- ciding the viability of entry into a sible customer base, among other cialized individuals or companies. ments, and competitive scenarios particular market include trade key factors. A typical market entry The engagement of knowledgeable Management. He is a of an unknown market. This strat- barriers, customer preference, strategy can take a few months to professionals can mitigate trade prolific investment coach, egy makes it easier for compa- pricing, competition, and export implement due to intensive prepa- risk in the target market and also Chartered Member of the nies to successfully establish their guidelines and restrictions. The li- ration. However, it worths the ef- improve the chances of discover- Chartered Institute for foothold and gain a leading edge ability of newness is another hin- fort because it will reduce business ing adequate market opportuni- in the new market and gain good drance, as a new business in a new failure risk. It will also ensure an ties. Good luck! Securities & Investment market access. With a market entry market could encounter difficul- informed decision on the launch (CISI) and a financial strategy, companies get access to ties, and this can lead to increased of the right product or services that literacy specialist. He can important information and thus, risk, as there is usually a lack of align with the expectations of the be reached on the twitter they can increase their productiv- legitimacy in any new market. For customers. More so, with new mar- ity and competitive position. It is this reason, vigorous brand aware- ket entry strategy, adequate atten- handle @drtimiolubiyi important to note that the market ness and advertainment need to be tion should be paid to the political and via email: entry strategy will help businesses accounted in other to legitimizing and institutional environment of drtimiolubiyi@gmail. at this time to efficiently enter new the business in a new market. the target market, where business- markets. For example, a business com,for any questions, Significantly, the entry mode es are likely to encounter different reactions, and comments.

SEND LETTERS, VIEWS AND COMMENTS TO [email protected], [email protected], [email protected] BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 10 The Quiet Revolution in Emerging- How Cash Transfers Prevent Market Monetary Policy Lockdown Tragedies est rates, and their central recession that it has caused, Rs12,000 ($75) to cover their cioeconomic consequences banks have started issuing there is effectively no end immediate subsistence of external shocks, such as domestic-currency-denom- in sight for QE. Several needs. COVID-19. inated assets in cases where central banks, moreover, Prior to the delivery For Pakistan, this was a the market is sufficiently are formally committed to of Ehsaas cash, I saw un- watershed moment in terms large. keeping interest rates low speakable suffering among of government function- Meanwhile, the mas- or even negative, and new people from many walks of ing. The crisis compelled sive expansion of cur- central-bank digital curren- life. There were day laborers the government to be more rency swaps by GSCBs has cies could make such poli- and hawkers, hotel and res- responsive, data-driven, ex- PIROSKA eased exchange-rate pres- cies relatively easy to imple- SANIA taurant staff, and domestic perimental, and ambitious. sures. These swap lines act ment. servants, security guards, Cost-effective digital meth- NAGY-MOHACSI as safety nets to forestall The upshot for emerg- NISHTAR and drivers. There were ods of working, new ways to Nagy-Mohacsi is foreign-currency short- ing-market central banks, Nishtar is Special also laid-off public-trans- coordinate the activities of Program Director ages in domestic markets. then, is that they will most Assistant on Poverty port employees, fishermen multiple stakeholders, and and Senior Fellow at Early in the pandemic, the likely continue to enjoy Alleviation and Social and miners, beauticians a whole-of-government ap- the Institute of Global Fed reactivated its standing monetary-policy spillovers Safety to the Prime and barbers, and millions proach have been institu- swap arrangements with from the GSBCs for the fore- of shopkeepers – all on the tionalized. These measures Affairs, London School of the ECB, the Bank of Can- seeable future. But there Minister of Pakistan with verge of hunger, with their will transform policymaking Economics. ada, the Bank of England, are limits to the benefits of the status of a federal savings used up. They, in a post-COVID-19 world. the Bank of Japan, and the this policy freedom. Many minister. along with private-school Finally, the legacy of the Swiss National Bank, while emerging-market central teachers, electricians, weld- program goes beyond short- also extending their maturi- banks may soon experience SLAMABAD – In 2017, ers, painters, carpenters, term relief. Built into its ties. It then followed up by unintended consequences I was a candidate to plumbers, car mechanics, design are long-term goals providing swap lines to the in terms of financial stability become the next Di- taxi drivers, and construc- to strengthen the safety net central banks of Australia, and governance. rector-General of the tion workers, did not know and increase financial in- ONDON – Cen- Brazil, Denmark, South Ko- After all, QE and a pro- World Health Orga- where their next meal clusion, both of which will tral banking in rea, Mexico, New Zealand, longed recession will inevi- Inization. At the 70th World would come from. bring lasting benefits to emerging mar- Norway, Singapore, and tably hit the balance sheets Health Assembly, I stood These stories were re- recipients and to Pakistan kets has under- Sweden. of companies, households, before health ministers peated across industries as a whole. Alongside this gone a quiet revo- While the Fed deployed and eventually banks. When from around the world and and regions, with even those is a commitment to trans- Llution during the COVID-19 similar measures during that happens, bankrupt- warned that three things used to earning a decent liv- parency and accountabil- pandemic. Unlike in past the global financial crisis a cies and non-performing could destroy the planet: a ing suddenly wondering if ity, which is the underlying crises, they have been able decade ago, it has now gone loans will soar, and govern- celestial event, a third world their finances would ever motivation for the publica- to mimic what central banks much further. At the end of ments in emerging markets war, or a pandemic. add up again. But the hand- tion of the report. In order in advanced economies March, it started offering a will find that they still have The COVID-19 pandem- outs brought stability and for democracies to ensure have been implementing: new additional temporary much less fiscal space than ic may not have destroyed comfort to millions of fami- progress, a culture of integ- counter-cyclical policies repo facility for foreign and their advanced-economy the planet, but it is certainly lies, and the whole country rity and openness must be with quantitative easing international monetary au- counterparts do for address- putting public and private watched as countless trag- ingrained in government in- (QE), local-currency as- thorities (FIMAs). This ar- ing such problems. institutions to a harsh test. edies were averted. stitutions and processes. set purchases, interest-rate rangement allows central Governance issues also In addition to its dire health Beyond the immediate History shows that disas- cuts, and monetization of banks and public monetary are likely to surface. Cen- consequences, the pan- crisis, the success of Ehsaas ters and their tragic conse- government deficits. institutions around the tral-bank asset purchases demic has decimated liveli- Emergency Cash offers quences can be a catalyst In the past, such policies world to use their existing that go beyond government hoods worldwide, squeez- Pakistan and other middle- of large-scale social change. would have fueled inflation stock of US Treasury bills as bonds will raise concerns ing the middle class and and low-income countries COVID-19 has presented and downward exchange- a channel for accessing US about transparency and ac- pushing low-income house- invaluable experience in Pakistan with an urgent and rate pressure. Not so this dollar liquidity. countability. In fact, this holds into abject poverty. speedily delivering a mas- unprecedented challenge, time. With the exception Although repos are not may well become an issue In Pakistan – the world’s sive national program in which could be met only of a few central banks that genuine currency swaps in advanced economies, too fifth-largest country by pop- a complex and uncertain by a program with the scale were already in trouble be- (because the FIMAs must (though they will still have ulation – 24 million bread- context. In order to share and ambition of Ehsaas fore the pandemic, emerg- already have dollar-denom- the advantage of more fis- winners rely on daily wages this knowledge, the govern- Emergency Cash. ing-market central banks inated assets on hand as cal space and robust institu- or are self-employed in ment recently released a In the wake of the pan- have been able to use QE collateral), they have none- tional arrangements). the informal economy. For report describing the know- demic, we must embrace to create more room to ma- theless proven to be a pow- One way or another, them, life came to a stand- how we gained through the the once-in-a-generation neuver in responding to the erful source of market con- emerging-market vulner- still with the implementa- program’s design and im- chance to replicate this am- crisis. fidence. And because the abilities are likely to become tion of a lockdown in March, plementation, as well as the bition globally and build a Monetary policies in the mere availability of repos apparent soon in various causing a widespread loss of operational challenges we fairer world that overcomes advanced economies en- can be enough to reassure domains of domestic fi- income that began fueling encountered and how they poverty, inequality, and the abled this change. Their own markets, they do not need nancial stability and gov- civil unrest and rioting. were addressed. climate crisis, with social QE programs have had posi- to be used in many cases. ernance. Policymakers in To mitigate the pandem- The program’s end-to- protection as a core pillar of tive spillover effects, and Moreover, repos can these countries would do ic’s socioeconomic damage, end digital approach, with that effort. they have expanded their serve as a precursor to true well to keep their guard up. Pakistan’s government cre- transparency hardwired The world has not faced currency swaps and foreign currency-swap arrange- ated the Ehsaas Emergency into its design, offers les- a more difficult challenge exchange repurchase (repo) ments, following the model Cash program, the largest sons about how to lever- since the end of World War operations in response to of the ECB’s repo operations social-protection program age personal identification II. But in our darkest hour, the crisis. Among the mea- with Poland and Hungary in in the country’s history. systems. By combining we can find a way forward sures taken by the glob- 2009. In the current crisis, Rolled out ten days after the phones, Internet connec- by collectively deciding to ally systemic central banks the ECB and the PBOC have lockdown began, it is deliv- tivity, and national IDs, a move toward a fairer, green- (GSCBs), the US Federal Re- both expanded swap lines ering one-time cash grants digital, demand-based so- er, and more sustainable serve’s response has been and repos within their mon- totaling more than $1.2 bil- cial-protection system can world for all. the most important, but etary spheres of influence, lion to more than 16.9 mil- be created to enable those swaps and repos by the Eu- allowing for a sharp reduc- lion households, covering in distress to seek support ropean Central Bank (ECB) tion in exchange-rate risks around 109 million people during crises. And it dem- and the People’s Bank of in emerging markets. – approximately 50% of the onstrates how cash transfer China’s (PBOC) have also Emerging-market cen- country’s population. Re- programs can be deployed tral banks’ additional room to counter the adverse so- Copyright: Project Syndicate, 2020. had a significant impact at cipient families are given www.project-syndicate.org the regional level. to maneuver will last for as The effects of interest- long as advanced econo- rate cuts and huge liquid- mies’ monetary policies ity injections in advanced remain sufficiently expan- economies have reached sionary. The chances for The COVID-19 pandemic may not have emerging markets as a re- that are high in the near and medium term, because destroyed the planet, but it is certainly sult of the global search for putting public and private institutions to yield. After an initial market advanced-economy cen- stumble in March, capital tral banks have been un- a harsh test. In addition to its dire health flows returned to emerging able (for various reasons) consequences, the pandemic has deci- markets, which have seen fully to exit from the QE that “mated livelihoods worldwide, squeezing high debt issuance in sub- they launched a decade ago, the middle class and pushing low-income sequent months. Emerg- even after growth and em- ing markets have also been ployment recovered. households into abject poverty Now, given the pandem- able to reduce their inter- Copyright: Project Syndicate, 2020. ic and the deep economic www.project-syndicate.org 11

BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 FINANCE & INVESTMENT 11

STOCKS MARKET COMMODITIES NSE NSE 30 FTSE 100 DOW JONES S & P 500 FTSE/JSE NASDAQ SYMBOL PRICE CHANGE %CHANGE VOLUME OIL 42.25 -0.57 -1.33 328,732 25,221.87 1,069.28 6,001.89 27,930.33 3,397.16 55,949.92 11,311.80 BRENT 44.26 -0.64 -1.43 215,178 0.089 129,151 CURRENT 0.07% 0.04% -0.19% 0.69% 0.34% +0.58% 0.42% NAT GAS 2.441 3.78 RBOB GAS 1.275 -0.022 -1.66 26,115 YEAR TO DATE -6.04% -9.18% -20.43% -2.13% 5.15% -1.99% 9.15% GOLD 1,947.40 0.9 0.046 353,225 SILVER 26.885 -0.262 -0.97 158,628 -0.6 12,405 COPPER 926.3 -0.06 2.927 -0.048 -1.61 75,084 TOP TRADERS TOP GAINERS TOP LOSSERS PALLADIUM Company Volume Value No Equity Opening Closing %Change No Equity Opening Closing %Change 2,178.80 -8.1 -0.37 1,589 WHEAT 534.5 6 1.14 72,611 ZENITHBANK 19,077,759 N321,989,340.65 1 NB N35 N36 2.86% 1 OKOMUOIL N80 N79 -1.25% SOYBEAN 903.75 -1.5 -0.17 85,675 FBNH 17,890,063 N89,452,277.60 2 INTBREW N3.3 N3.6 9.09% 2 PRESCO N51.5 N51 -0.97% CORN 341 1.75 0.52 176,657 SUGAR -0.2 42,116 3 12.81 -1.54 GUARANTY 16,147,904 N408,791,107.80 UNILEVER N13.75 N13.95 1.45% 3 UACN N5.85 N5.5 -5.98% COFFEE 119.65 0.7 0.59 14,741 NB 9,129,014 N327,436,627.45 4 UPL N1.13 N1.24 9.73% 4 GUARANTY N25.25 N25.1 -0.59% COTTON 64.28 -0.24 -0.37 12,095 CHAMS 8,734,022 N1,783,274.62 5 OANDO N2.24 N2.35 4.91% 5 ZENITHBANK N16.9 N16.8 -0.59% ROUGH RICE 12.36 0.02 0.16 840 COCOA 2,416 16 0.67 15,441

Most banks Personal Finance in Nigeria recently re- viewed their custom- Why banks are reducing your international ers’ international spending limit down- wards with many of spending limit and how it affects you the banks capping with Lagos Talks FM re- run to the banks in order will have on his business. increase the selling price from not being able to meet the international cently, noted that when- to source forex for their He decried the move, ex- of their products to make a their demands, so they had spend limit per cus- ever customers buy things everyday needs, further put- plaining that the limitation respectable profit in order to a need to put a cushion on tomer at $100 per in dollars with their naira ting a strain on bank’s forex will now mean that he and survive. The end sufferers, as the forex expenditure that cards, they usually spend reserves. thousands of other people always, will be the everyday they allow because they day. In this report, from their bank’s deposi- With this new situation, in the mini importation Nigerians on the street. themselves cannot source Business A.M.’s Sav- tory of foreign exchange, the CBN might not need industry in Nigeria will now Modupe Adeleye, a fi- forex from the CBN, said iour Adugba, takes with the banks doing the to step in in order to help have nowhere to turn to in nance analyst argues that Adeleye. a look at why banks currency conversion and mitigate the effects of the order to get the necessary although the reduction of The CBN itself has not have decided to go then deducting the naira forex shortage as Nigeria is a forex that they will need to the international spending been able to meet its forex this route while ex- equivalent. With the scarcity country that depends more buy the volume of goods that limit does not have a direct obligations to the banks amining the effects of forex in the country now, on imports than exports. they usually sell. impact on the everyday and the Nigerian public. the banks had to control According to Okougha, Nigerian, it does have an Adeleye explained that the it will have on the their forex expenditure, es- How does the reduction mini importers usually effect on Nigerians in the apex bank has not met its economy. pecially because COVID-19 of the international spend- make profits when they buy diaspora as they can’t with- commercial obligations, has stunted the amount ing limit affect you? a large quantity of goods draw enough funds to meet retail obligations as well as WHY ARE THE BANKS of forex being remitted to The downward review abroad and sell in Nigeria. their everyday needs or its I&E obligations. With REDUCING CUSTOMERS’ banks in Nigeria by Nigeri- of the international spend- He explained that this new obligations. the coronavirus effectively international spending ans in the diaspora. ing limit affects the average move by the banks will now According to her, the ef- slowing down the amount limits? Additionally, official Nigerian primarily because make sure that profits mar- fects that would have been of diaspora remittance to The most important thing forex trades to BDCs are it stunts their ability to buy gins are squeezed further felt by Nigerians back home Nigeria, the CBN will need to note is that Nigeria’s for- still suspended meaning what they want abroad but in a market that is already due to the downward re- to dig deep to find a lasting eign exchange reserve is low that the forex in circulation there are deeper underlying suffering from the effects of view of the international solution to Nigeria’s forex and banks are not spared the is even shorter in supply. economic consequences COVID-19. spending limit has already woes. More importantly, the effects of the low circulation And although the banks here. Effectively, from been necessitated by the government needs to create of forex. It now looks like don’t typically source forex Business A.M. spoke with Okugha’s explanation, the short supply of forex in the stimulating policies that the banks themselves are from BDCs, one can not Jefferey Okougha, a mini downward review of the in- country and that the banks’ will help move Nigeria away now making a shift towards underestimate the effect importation expert who ternational spending limits decision to review spend- from being a heavy forex-de- managing their own forex that a stunted forex sup- usually imports goods from on debit cards might now ing limits downward is just pendent economy. For now, spend generally. ply will have on the banks. China and other foreign force mini importers to buy a reactionary occurrence to all we can do is hope that the Ugochukwu Obi, the CEO That means that everyday countries about the impact fewer products. This means the reality of the market. economy bounces back. of Nairametrics speaking Nigerians will also have to that the downward review that they might need to “The banks are suffering”

Moses Obajemu With the drop in oil prices, help them back on their feet. Avoiding the looming recession government revenues are The World has equally THE TELL- expected to fall from an al- spoken about effective gov- TALE SIGNS OF Recovery,” assumes that that consultative public forum pact of coronavirus on glob- ready low 8% of GDP in 2019 ernment response to the another creeping the spread of COVID-19 in where she presented the al economy, which includes to a projected 5% in 2020. pandemic as a way of steer- recession have al- Nigeria would be contained draft 2020 medium term ex- the crash of oil price. The With some five million ing the economy away from ways been there for the dis- by the third quarter of 2020. penditue framework and fis- council, which is led by Prof projected to lose their jobs recession. It said immediate cerning minds to see. And If the spread of the virus be- cal strategy paper, she said Doyin Salami, also pointed as a result of the impending efforts to contain the spread those who see the signs have comes more severe, the re- that the Federal Govern- out depletion of foreign re- recession, it is imperative of COVID-19 and stimulate been relentless in sound- port said the economy could ment’s earnings dropped by serves as other negative im- for the federal government the economy will be even ing the alarm bell, just so contract further. Before CO- about 65 per cent following pacts the virus would have to quickly put in place pal- more urgent to address the federal government will VID-19, the Nigerian econo- the cuts in oil production. By on the economy, so Nigerian liatives for manufacturing bottlenecks that hinder the put in place policies, incen- my was expected to grow by her admission, the economy government has to provide firms and other companies productivity of the economy tives and packages to avert it. 2.1% in 2020, which means faced serious challenges in concrete measures to stabi- to enable them cope with the and job creation,” said Shub- But it looks the whole efforts that the pandemic has led the first half of the year as lise the economy in order to present hardship and keep ham Chaudhuri, World Bank may be too little in stopping to a reduction in growth by the macroeconomic envi- avoid recession. their workers.. Country Director for Nigeria. the economy from receding more than five percentage ronment was significantly With a negative eco- Recommendations On its part, the Presi- into another recession, the points. disrupted by COVID-19. nomic performance in the have bren made to govern- dential Economic Advisory second time in four years. Even our finance minis- With crude price drop- second quarter and a third ment on how to go about Council advised that the The World Bank first ter, Zainab Ahmed, alluded ping from $72 per barrel in quarter that looks to go the this. Clem Agba, minister government consider bud- pressed the alarm button to the possibility of the econ- January to below $20 in April way of the second quarter, of state for finance, bud- get cut. This has been done in June this year when it omy slipping into recession 2020, the budget became the scary prospect staring us get and national planning, but we are yet to see how published a report predict- this year. Ahmed said the unsustainable in the face is a big contrac- said last week that Nigeria this impacts the economic ing that the economy would country’s real GDP had been The massive output cut tion in GDP and economic could only avoid slipping performance, especiallyu as likely contract by 3.2 percent projected by the National by OPEC and its allies to sta- recession. into recession again un- capital votes have not been in 2020, anchoring the pro- Bureau of Statistics to con- bilise global oil market, with The World Bank said the less it achieves a very strong released on time to spur eco- jection on the the collapse in tract by 4.2 per cent in 2020, Nigeria contributing about macroeconomic impact of quarter three 2020 economic nomic activities. oil prices and the COVID-19 as against the previous pro- 300,000 barrels per day of the COVID-19 pandemic will performance, Of course, the As the third quarter rolls pandemic. Indeed, the bank jected growth of 2.9 per cent. production cuts, resulted in likely be significant, even if only way to achieve strong on, it is important for the described the impending re- “Q2 and Q3 2020 GDP sharp revenue drop for the Nigeria manages to contain economic performance in government to help com- cession as a severe econom- growth is projected to be country. the spread of the virus. This the third quarter and avoid panies, manufacturing con- ic recession, the worst since negative, which means that The Presidential Eco- is because oil represents a recession is for govern- cerns and other economic the 1980s. the country will lapse into nomic Advisory Council more than 80% of Nigeria’s ment to create a conducive agents by creating a condu- The report, “Nigeria In a second recession in four (PECA) also warned that Ni- exports, 30% of its banking- environment for businesses cive environment for their Times of COVID-19: Laying years,” she said. geria could slip into another sector credit, and 50% of the too thrive as well as to grant operations and continued Foundations for a Strong During a virtual public recession following the im- overall government revenue. bailouts to some secctors to success. ec BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 12 FINANCE & INVESTMENT CAPITAL MARKETS Nigeria has only 400,00 share accounts; SEC to reverse trend with 10-year plan Omobayo Azeez and is therefore not partici- pating in the market. IN A POPU- “These will also be target- LATION OF ed to grow the Nigerian retail ABOUT 200 MIL- investor pool.” he assured. LION people, In addition, Yuguda said expectations are high that Nigerians should expect a participation in the invest- very vigorous implementa- ment wing of financial sys- tion of the 10-year Capital tem should be high. Market Master Plan. On the contrary however, The Coronavirus (CO- there are only 400,00 share VID-19) pandemic, which accounts in the country “has shown how deficient which represent the volume our economy really also of- of individual participation at fers an opportunity for the the Nigerian stock market. capital market to help de- Lamido Yuguda, the di- velop facilities within the rector-general of Nigeria’s country that will help the Securities and Exchange country save its scarce for- Commission (SEC), on Fri- eign exchange earnings be- L-R: Oluwole Adeosun, 1st vice president, Chartered Institute of Stockbrokers (CIS); Tope Omojokun, president, Fund Manag- day regretted that an esti- ing frittered in the form of ers Association of Nigeria (FMAN); Omotunde Amolegbe, president and.chairman of council, CIS; Prince Abimbola Olashore, mated 400,000 share ac- going abroad for medical at- president, Association of investment Advisers and Portfolio Managers (AIPM); and Akinduro Phillips, executive secretary, counts in a population of tention, or tourism. IAPM, at signing of MoU on proposed Chartered Institute of Securities and Investment of Nigeria in Lagos, recently about 200m is abysmally In developing these facili- low, even as the current 50- ties, however, the SEC boss year average age of investors said there is need for the Profit taking expected on NSE as interim dividend is a disaster waiting to hap- right policy environment, pen. following the commission outlook keeps market bullish amid asset revaluation ”We need to restore in- will seek collaboration with vestor confidence and at- government and other regu- The consumer goods in- tract the retail and young latory agencies, as the only Investors gain N12.2bn; turnover tumbles dustry followed with 96.320 investor into the market. way of attracting the right million shares worth N2.199 Thus, we will ensure strict investments that takes care Analysts make buy call on banking stocks billion in 3,148 deals. The enforcement of our Rules of the nation’s needs. third place was the conglom- and Regulations, strengthen Still on market infrac- Omobayo Azeez All other indices finished “Investors’ focus at the erates industry, with a turn- our enforcement regime and tions, Yuguda said his man- higher with the exception of moment should, therefore, over of 89.376 million shares clamp down on illegal op- agement team inherited a MARKET AN- NSE Oil/Gas, NSE Lotus and be on banking stocks with worth N145.612 million in erators luring unsuspecting lot of cases which are be- ALYSTS SAY they NSE Industrial Goods Indi- half year dividend policy, 757 deals. investors with various Ponzi ing resolved, working with expect more prof- ces which depreciated by and a few other listed whose In terms of trade volume, Schemes,” added. the various Self-Regulatory it taking as the 0.92 per cent, 0.12 per cent prices have not been adjust- trading in the top three equi- Consequently, he said Organisations such as the market opens this week fol- and 0.41 per cent while the ed for already announced ties namely Zenith Bank Plc, the commission will drive Nigerian Stock Exchange, lowing last week’s activities NSE ASeM closed flat. cash/scrip dividends. This is Guaranty Trust Bank Plc and investor education, with tar- FMDQ Exchange and NASD which saw investors keeping The year-to-date (YTD) not forgetting few listed eq- Transnational Corporation gets split into primary, sec- and Capital Market Opera- the market bullish on expec- loss moderated to -6.0 per uities yet to unveil their full- of Nigeria Plc accounted for ondary schools and tertiary tors, including stockbrok- tation of interim dividend cent, while the month-to- year numbers,’ according to 298.901 million shares worth institutions and infusion of ing firms, registrars, issuing payment and profit taking date (MTD) gain increased the analysts. N4.761 billion in 3,056 deals, capital market studies into houses, solicitors, among Trading activities on the to 2.1 per cent. As the close of the week, a contributing 31.45 per cent their curriculum. others. floor of the local bourse were The marginal gain none- total turnover of 950.414 mil- and 47.03 per cent to the to- Another class of potential He said the plan is to re- bullish as risk appetite was theless, “Our view continues lion shares worth N10.123 tal equity turnover volume investors in need of tailor- duce infractions to the bar- sustained buy investors. to favour cautious trading as billion in 16,647 deals were and value respectively. made capital market educa- est minimum, adding “we Such expectations are risks remain on the horizon traded during the week by A total ETPs of 50,479 tion, he said, is employees have very strong resolve to coming amidst revaluation due to a combination of the investors on the floor of the units valued at N405.465 with little or no knowledge, resolve infractions quickly.” of equities assets in the mar- increasing number of CO- Exchange, in contrast to a to- million were traded in the ket as better-than-expected VID-19 cases in Nigeria and tal of 1.327 billion shares val- week in 20 deals, compared results keep roll in, making weak economic conditions,” ued at N13.934 billion that with a total of 25,904 units Global equities market reel from investors to do reassessment investors at Cordros Capital exchanged hands last week valued at N169.443 mil- sustained rise in COVID-19 numbers of the market based on the said, cautioning investors to in 19,392 deals. lion transacted the previous H1 numbers, which now seek trading opportunities in The financial services week in 17 deals. serve as their guide before only fundamentally justified industry, measured by vol- Similarly, a total of 26,860 Charles Abuede as 3 of 5 indices closed the they make the next big move. stocks. ume, led the activity chart week lower. Russia’s RTS units of bond, valued at On the back of these fac- Elsewhere, experts noted with 624.278 million shares N33.043 million were also and South Africa’s FTSE/ valued at N6.181 billion WITH THE tors, the NSE All-Share Index that the market has reached traded in 32 deals compared JSE All-Share indices lost traded in 8,313 deals; thus GLOBAL CO- (ASI) and market capitaliza- the peak period of the half- with a total of 2,542 units val- 4.5 per cent and 2.4 per contributing 65.68 per cent VID-19 cases tion both appreciated by 0.09 year reporting season, and ued at N3.412 million trans- cent week on week despite and 61.06 per cent to the to- above 22 mil- per cent to close the week at that earnings released will acted in seven deals in the the progress recorded in tal equity turnover volume lion from last week, mar- 25,221.87 basis points and lead market fundamentals previous week. COVID-19 vaccine de- N13.158 trillion respectively. through this month. and value respectively. ket performance in the velopment in both coun- developed markets was tries. Meanwhile, Brazil’s lacklustre with only US in- Ibovespa also declined apiece. Morocco’s Casa- costs surged during the peri- dices advancing week on 0.1 per cent from the pre- blanca MASI and Mauri- eTransact posts N118.25m od under review to N12.272 week as the S&P 500 and vious week. And India’s tius’ SEMDEX indices also million, up from N7.397 mil- NASDAQ indices gained BSE Sens, on the flip side, lost, down 0.4 per cent loss in three months lion posted in Q2 2019. 0.5 per cent and 2.6 per gained the most, up 1.5 and 3 basis points respec- Omobayo Azeez loss of N118.26 million, from However, despite eTran- cent week on week respec- per cent week on week. tively. a profit of N151.312 million zact moderating its admin- tively despite frail labour China’s Shanghai Com- Across the Asian and EVEN AS in the comparative period of istrative expenses from data. posite trailed, up 0.6 per Middle East markets, the SOME LISTED 2019. N470.962 million achieved In Europe, France’s cent week on week due to performance was bull- COMPANIES The payment company in Q2 2019 to N389.271 CAC 40 lost 1.5 per cent improving relations with ish with only Thailand’s churn out positive num- revenue also declined from million in Q2 2020, oper- while Germany’s XETRA the US. SET declining 2.1 per cent bers that beat expectations, N6.458 billion filed in the ating profit plunged from DAX and UK’s FTSE All- In Africa, the market week on week. Converse- operations of eTransact be- same period of 2019 to N75.069 million in Q2 2019 Share indices fell week on performance was bearish ly, UAE’s ADX General and tween April and June, this N5.769 billion in the second to N152.644 million in Q2 week by 1.1 per cent and with only 2 out of 6 indi- Turkey’s BIST 100 indices year could not rescue it to quarter of 2020. 2020. 1.4 per cent. Japan’s Nik- ces advancing week on led the gainers, up 3.6 per break free of negative per- This decline continues Even finance cost rose kei 225 and Hong Kong week. Egypt’s EGX 30 and cent and 2.3 per cent from formance. with gross profit as it de- from zero recorded in the Hang Seng Indices de- Nigerian All-Share index last respectively. Similar- According to its unau- clined by more than 50 per- corresponding quarter to clined 1.6 per cent and gained 2.2 per cent and ly, Saudi Arabia’s Tadawul dited account for the sec- cent from N553.428 million N4.973 million while invest- 0.3 per cent from the past 0.1 per cent from the pre- ASI and Qatar’s DSM 20 ond quarter of the year filed posted in the corresponding ment income declined from week respectively. vious week. Kenya’s NSE closed higher by 1.8 per with the Nigerian Stock quarter of 2019 to N248.899 N66.246 million filed in Q2 On the other hand, 20 and Ghana’s GSE Com- cent and 1.7 per cent from Exchange (NSE), the e-pay- million in Q2 2020. 2019 to N39.367 million in performance across the posite indices led the los- last week respectively. ment company recorded a Selling and marketing Q2 2020. BRICS markets was mixed ers, declining 1.1 per cent BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 FINANCE & INVESTMENT 13 FIXED INCOME & MONEY MARKETS

and OVN rates printed at close at 2.3 per cent. Money Market Round-up: 2 per cent and 2.6 per cent Last week in the bonds respectively with system li- market, the yields trended quidity settling at N490 bil- higher as the performance lion. in the bond market was Naira relatively stable amid Also, the performance bearish with the average in the secondary Treasury yield rising by 11 basis bills market was mildly points from the previous market illiquidity, fall in oil price bullish as average yield week to close at 7.8 per across benchmark tenors cent. The market recorded and OVN rates opened the trended lower, down 13 week in the double-digit marginal gains at the start Bullish T.Bills; Bearish bonds basis points week on week of last week (-3bps) and band at 16.4 per cent and to close at 2.1per cent. The 17.5 per cent respectively as Thursday (-2bps) while the short-term instrument re- trading session last Tues- system liquidity remained corded the most selloffs DMO bonds oversubscribed tight at N88 billion (vs. day closed flat. However, as yields rose by 41 basis sell pressures on Wednes- N220.7 billion last week). points to 1.6 per cent while Moses Obajemu ($45.1m) to $13 billion. hand, the APRIL 2021 in- However, both the OBB and day (+1bps) and Friday The SEPT 2020 instrument strument (contract price: the medium-term instru- (+15bps) were sufficient to OVN rates declined to 13 ment rose by 6 basis points Nigeria’s ex- (contract price: N391.38) N410.20) fell by $20 million per cent and 13.5 per cent offset the previous gains in ternal reserves received the highest sub- with total value at $486.9 to 1.3 per cent. On the the market. Across tenors, respectively on Wednes- other hand, the long-term tapered slightly scription of $50 million million. day while system liquidity the short-term bonds re- by seven basis and taking the total value Furthermore, in the instrument gained as yield corded improved demand rose to N103 billion. At the declined 61 basis points to points week on week to to $1.3 billion. On the other money market, the OBB close of the week, the OBB as yields declined 5 basis $35.6 billion as the Central points week on week, while Bank of Nigeria continued short and long term in- its weekly foreign exchange struments recorded losses, intervention sales. with yields climbing 18 and On the global stage, oil 16 basis points respectively prices fell slightly last week, from last the week. down 2.5 per cent week on Meanwhile, at the pri- week to $43.7 per barrel mary market, the DMO re- due to weak prospects of opened the JANUARY 2026, sharp economic recovery MARCH 2035, JULY 2045 post-pandemic. and MARCH 2050 instru- The CBN FX spot rate ments, offering N25.0 bil- closed flat at N381 to a lion, N40 billion, N45 bil- dollar while at the parallel lion and N40 billion in that market, the naira depreci- order. All instruments were ated N2.00 to close at N477 1.3x, 1.2x, 1.0x and 2.9x to a dollar. At the Investors’ oversubscribed while the & Exporters’ (I&E) Window, MARCH 2035 and MARCH the NAFEX rate closed flat 2050 notes were over al- at N38… per dollar as activ- lotted. The marginal rates ity level in the I&E Window on the instruments were spiked 66 per cent to $317.4 6.70 per cent, 9.35 per cent, million from $191.2 million 9.75 per cent and 9.90 per recorded in the previous cent respectively (vs. 6.0%, week. 9.5%, 9.8% and 10.0% at the At the FMDQ open previous month’s auction). contracts, the total value On the aggregate, a total of N130.0bn was offered with of the naira at the FMDQ L-R: Dayo Obisan, executive commissioner, operations, Securities and Exchange Commission (SEC); Lamido Yuguda, director- subscription and allotment Securities Exchange (SE) general, SEC; and Reginald Karawusa,executive commissioner, legal and enforcement, SEC, during the 2020 First Capital of N470.1bn and N177.0bn FX Futures Contract Mar- Market Committee webinar meeting in Abuja. ket increased 0.4 per cent respectively.

said Edward Moya, senior of a customary U.S. Securi- Dollar market analyst at OANDA IHS Holdings ties and Exchange Com- in New York. mission review process of a Nigeria’s foreign edges higher The data contrasted talk up $7bn registration statement relat- with weakness in the euro ing to the proposed offering reserves dip $20m zone, as the pent-up de- potentially and subject to market and against mand unleashed last other conditions”. month by the easing of largest The planned IPO is one business a.m. CBN to intervene at the I&E euro coronavirus lockdowns of at least two big tower of- window. Notably, on a w/w dwindled. African firm ferings that are in the works. THE CBN’S basis, FX rates remained un- business a.m. “Clearly the PMI num- It had been reported in FOREIGN RE- changed across the board. bers this morning suggest US listings February by Bloomberg that SERVES sustained This was as rates at the of- that Europe is losing a little IHS Holding had selected its descent as ficial market, I&E window, THE U.S. DOL- momentum here and that Citigroup Inc. and JPMor- and parallel market closed LAR ON FRIDAY via IPO forex outflows continue to we’re seeing some turbu- gan Chase & Co. as global outpace inflows, thus dip- flat at N381/$, N386/$ and gained against lence in other areas of the coordinators for a listing N472.5/$ respectively. Also, the euro for the Charles Abuede ping by USD20.37 million global economy. So that that could value Africa’s week on week to USD35.60 the CBN FX reserves closed first week since mid-June is weighing on the perfor- largest operator of wireless at $35.6bn, down 0.1% w/w. after data showed a strong billion. mance gap between the IHS HOLDING towers at as much as $7 bil- However, the naira was Despite the CBN’s stron- uptick in U.S, business ac- U.S. and its major counter- LIMITED, Africa’s lion. Thus, data compiled by ger commitment towards tivity, while the single cur- flat against the US dollar parts,” said Karl Schamot- wireless towers Bloomberg revealed that at week on week to NGN386/ exchange rate unification, rency was held down as an ta, chief market strategist operator, has given hint yet that amount it would be the analysts till see legroom for August batch of European USD at the I&E window at Cambridge Global Pay- that it is exploring a poten- largest IPO in the U.S. by an but depreciated by 0.4 per- the currency to depreci- business surveys pointed ments. tial registered initial public African company. ate further, at least towards to a stuttering economic cent to NGN477.00/USD at The euro EUR= dipped offering in the U.S, a deal In addition to Wendel, a the parallel market. In the its REER derived fair value. recovery. to a one-week low of $1.175 which could be regarded as French buyout firm, IHS’s This is based on the widen- U.S. business activity forwards market, the naira against the greenback ear- the biggest listing ever by owners comprise Goldman appreciated against the US ing current account (CA) snapped back to the high- lier, before rising back to an African company in the Sachs Group Inc. and South position, currency mispric- est since early 2019 this dollar across the 1-month $1.179, down 0.61% on the United States, shareholder African wireless carrier (+0.1% to NGN387.07/ ing, which could induce month as companies in day. Wendel SE said on Tuesday. MTN Group Ltd. Bloom- speculative attacks on the both the manufacturing USD), 3-month (+0.09% to The greenback escaped IHS Holdings on August berg also reported on how NGN389.47/USD), 6-month naira, and the resumption and services sectors saw a a ninth consecutive weekly 14, 2020, flagged the list- the company began reviving of FX sales to the BDC seg- resurgence in new orders (+0.1% to NGN393.27/ decline that would marked ing, stating that “the timing, work on the sale of a share USD) and 1-year (+0.7% ment of the market which even as new COVID-19 the longest losing streak number of shares to be of- in late 2019 after scrapping should place an additional cases remain stubbornly to NGN406.56/USD) con- since the summer of 2010 fered and price range of the strategies back in 2018 ow- tracts. layer of pressure on the re- high across the country. and a run that has only proposed offering was yet to ing to electoral and political serves as the CBN funds the “The Markit PMI flash Two weeks ago, market happened five times since be determined, as any pro- uncertainties in Nigeria, its situation in the spot market backlog of unmet FX de- readings show the U.S. is 1990. posed offering would com- main market. mand. outperforming Europe,” remained the same amid mence after the completion the continued refusal of the BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 14 INSURANCE BUSINESS Security P.Close Open High Low Close % Change Volume Value 52Wk High 52Wk Low % Change Ytd AFRINSURE 0.20 0.20 0.20 0.20 0.20 - 655,959 131,192 0.20 0.20 0.0% AIICO 0.90 0.90 0.92 0.90 0.91 1.11% 6,226,895 5,612,958 1.22 0.61 26.4% CORNERST 0.58 0.58 - - 0.58 - 2,700 1,431 0.68 0.17 28.9% LAWUNION 1.00 1.00 - - 1.00 - 190 200 1.22 0.37 100.0% NEM 1.87 1.87 - - 1.87 - 51,350 105,268 2.42 1.44 -22.7% ROYALEX 0.26 0.26 - - 0.26 - 22,055 5,313 0.33 0.20 -13.3% SOVRENINS 0.20 0.20 - - 0.20 - 22,727 4,545 0.22 0.20 - Quoted Insurers Quoted FINANCE & INVESTMENT COMPANY FOCUS NEM Insurance Background ucts protect your items such NEM INSUR- as your car, home, or the ac- ANCE PLC is one tivities you engage in, such as of the pioneer in- travel. surance companies in Nige- The insurance products ria. It started in 1948 through available in this category in- the agency of Edward Turner clude & Co and eventually became • Goods In Transit a Nigerian branch of NEM • Fire And Special Perils Insur- General Insurance Asso- ance ciation Limited of London in • Travel Insurance 1965. Due to the privatisation • Motor Insurance policy by the Federal govern- • Home Protection ment, the company became • Professional Indemnity quoted on the Nigerian Stock • Enhanced Motor Third Party Exchange. They eventually merged with Vigilant Insur- SME Insurance products L-R: Shuaibu Ahmed, chairman, Noor Takaful; Muktar Bakare, director; Fidelis Atanya, logistics manager, ITB Nigeria ance Company Ltd in 2007, While most large compa- Limited; and Aminu Tukur, managing director/CEO, Noor Takaful, during the presentation of surplus cheques to policyholders following the recapitalisation nies insurance coverage rel- by Noor Takaful in Lagos, recently exercise. evant to their business needs, Ever since its establish- small and medium-sized en- ment, NEM Insurance PLC terprises (SMEs) often lack has contributed immensely this. They must have access 2.033bn new insurance shares towards the growth of the to SME insurance products Insurance sector in Nigeria to protect themselves from and uphold their promise liabilities which may lead to hit NSE daily official list of adding value to the inter- drastic losses. est of their stakeholders. It NEM insurance offers a Omobayo Azeez change, the company said List of The Nigerian Stock listing, the total issued and has expanded its operations range of insurance products 2,032,500,000 ordinary Exchange (The Exchange). fully paid-up shares of the across West Africa with the to SME owners. They include CONSOLI- shares of 50 Kobo at 52 “The additional shares company has now risen to successful commencement • Burglary Insurance DATED HALL- Kobo on the basis of 1 new listed on The Exchange 10,704,500,000, up from of its subsidiary, NEM Asset • Product Liability MARK INSUR- ordinary shares for every 4 arose from the Company’s 8,672,000,000 ordinary Management became part • Fidelity Guarantee ANCE PLC plans shares held as at February Rights Issue of 2,032,500,000 shares. of the Brand in March 2016. • Motor Insurance to raise additional funds 3, 2020. ordinary shares of 50 kobo “With this listing of the They further added an affili- • Cash In Transit from the capital market, the The statement reads each at 52 Kobo per share additional 2,032,500,000 ate company in the same year, • Group Personal Accident company has disclosed in “Dealing Members are on the basis of 1 new ordi- ordinary shares, the total is- known as REGENCY NEM a public statement it made hereby notified that ad- nary shares for every 4 or- sued and fully paid up shares INSURANCE (GHANA) LIM- How to process claims available on the matter. ditional 2,032,500,000 or- dinary shares held as at 3 of Consolidated Hallmark ITED. With a clear understand- In a statement signed dinary shares of Consoli- February 2020. The Rights Insurance Plc has now in- Nem Insurance plc offers ing of the impact that prompt by Godstime Iwenekhai, dated Hallmark Insurance Issue was 100 per cent sub- creased from 8,672,000,000 motor third party and com- settlement of claims has on head, Listings Regulation (the Company) were today, scribed.” to 10,704,500,000 ordinary prehensive insurance pack- its reputation, NEM Insur- Department and published Thursday, 20 August 2020 The insurance company shares of 50 kobo each,” the ages for automobile owners ance Plc has a straightforward on the Nigerian Stock Ex- listed on the Daily Official stated that with the new statement further read. to guard the insurer against claim procedure. unforeseen events. You can access the claim form on their website, fill in NEM Insurance Products the required details and sub- Nigeria’s total pension fund – Classes of Insurance mit. Once you submit your Their insurance products form, an agent from their or- fall into three categories: into ganisation will reach out to assets climb to N11.09trn in H1‘20 Corporate, personal and SME you. IGERIA’S bonds and the corporate products. T O T A L infrastructure bonds con- Their customer service PENSION tributed N748.2 billion Corporate Insurance They pride themselves fund assets which is 6.75 per cent of products in their swiftness to respond climbed to the total assets for the pe- These are insurance poli- to claim requests and their N11.09N trillion as at the riod under review. cies used by organisations ability to uphold their com- end of the first six months Further revelation from to guard against operational pany values. You can quickly in 2020. This rise signi- the document on the Pen- risks such as financial loss, contact their customer ser- fies an increase of 2.8 per sion commission’s web- employees health, accidents, vice team or provide your cent or N300 billion from site stipulates that the lo- or even theft. Every organisa- feedback through their on- N10.79 trillion recorded cal money market as well tion needs to keep the busi- line form. NEM also has a in May 2020. Recent data as the foreign money mar- ness running swiftly. whistleblowing policy as from the National Pension ket securities accounted These policies, however, they are committed to being Commission (PenCom) for N1.62 trillion and do have limits, and the insurer transparent and holding each and accessed by Business into Federal Government’s The increase in the FGN N14.5 billion which is 14.6 is held responsible for any other accountable. This policy A.M shows. Securities, on which the securities can be linked to per cent and 0.13 per cent other liability which the insur- enables stakeholders and A breakdown analysis sum of N6.31 trillion ac- the strengthening of in- of the total pension fund ance product doesn’t cover. members of the staff to voice of the data, as found on counting for 56.93 per cent vestors’ confidence in the assets respectively for the The insurance products their concerns in a responsi- the regulatory body’s web- went into FGN bonds with market which has seen a period under review. available in this category in- ble manner and following the site, revealed that the to- the treasury bills, agency positive performance on In a like manner, real clude whistleblowing policy. tal number of Retirement (NMRC and FMBN) bonds a month on month com- estate properties con- • Motor Insurance Savings Account (RSA) getting N1.02 trillion and parison and the total eas- tributed about N221.23 • Marine Insurance Operational branches fund increased from N8.35 11.01billion as well as ing of the lockdown occa- billion into the fund • Aviation Insurance They have several branch- trillion reported in the Sukuk and green bonds sioned by the COVID-19 while private equity fund • Oil And Gas es and retail outlets across the preceding month to N8.55 recording N98.42 billion pandemic, which earlier and cash & other assets • Engineering Insurance country. trillion as of June 2020. and 14.5 billion invest- dampened the confidence recorded N33.96 billion • Computer And Electronics NEM Insurance Plc con- The data further ments respectively. While of the investors in the and N153.4 billion each. Policy tinues to strategically position showed variously, some the state government se- market. While the total Retire- • Fidelity Guarantee itself to continuously deliver assets investments under curities rose to N152.93 The corporate debts ment savings account • Group Personal Accident value to its customers and the pension fund scheme billion and accounting for securities which are com- Fund registrations stood Personal Insurance prod- maintain its reputation as a which include the sum of 1.38 per cent of the total binations of corporate at 9.039,748 as at the end ucts top insurance company in Ni- N7.5 trillion representing pension fund assets. bonds, corporate green of June 2020. These insurance prod- geria. 67.25 per cent invested BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 EXECUTIVE 15 KNOWLEDGE SERIES In Association with STRATEGY Andrew Shipilov, T HELPS IF YOU’RE A GENERALIST with no ego. In 1991, a Beijing Iactor named Li Lianjie was given the starring role in a marquee Hong Kong film. Once Upon a Time in China, a biopic of a legendary Chi- nese kung fu master, ushered in a golden age of kung fu movies in Hong Kong, then the centre of Chinese cin- ema. It also made the career of Li, a champion martial art- ist who, as it happened, was also pretty good at acting. He would become a household name millions of moviegoers now know as Jet Li. Around the time Li was wowing audiences, another Chinese émigré was also making her mark in Hong Kong. Faye Wong (known to Mandarin-speakers as Wang Fei) began her singing career in the late 1980s with Can- topop, the mainstay in the Cantonese-speaking city’s music industry. But she was only one of many churning out formulaic songs. And, as a mainlander, she was seen as less “sophisticated” or “glamorous” than her Hong Kong counterparts. In danger of sinking into oblivion, Wong experiment- How to Become a Star in a Strange Land ed with alternative music, infusing influences from the tain more status relative to Hong Kong for both native in the early 1980s. He later experiences can inject novel Strategic Alliances as well likes of Scottish post-punk migrants who had higher actors and new entrants. The branched out to the patri- ideas into creative projects. as the Building Digital Part- band Cocteau Twins into standing back home. But analysis covered a three-year otic film genre and starred in Li, for one, elevated Hong nerships and Ecosystems her repertoire. She also took significantly, we also found window – the average length documentaries before fading Kong kung fu films with his programmes. up acting in both television that versatile generalists who of studio employment con- to relative obscurity in the virtuosity in Northern Chi- and movies. Her gamble paid traversed genres had better tracts – and was based on mid-1980s. After arriving in nese martial art styles. By off – Wong became a huge odds of success in their new movie credits, which list ac- Hong Kong, Li demonstrated contrast, although specialist star in the Chinese music home. tors per role importance. a similar versatility and work migrants may also spur in- Stan Xiao Li is a professor industry, with a status few Our models show that ethic. While his forte was un- novation, they can do so only at the City University of Hong have surpassed. Be like water high-status mainland actors deniably fighting sequences, in limited contexts. Kong. His recent research From relative unknowns We collected Hong Kong who moved to work in Hong he also handled dramatic Our findings offer a glim- projects centre on the rela- to superstars, from commu- and mainland China movie Kong experienced status scenes and even slapstick mer of hope for low-status tionship between diversifica- nist China to freewheeling information from film ar- loss. Furthermore, we found comedy with aplomb, and generalist migrants, whose tion and firm performance, Hong Kong, Li and Wong chives, databases and books. that generalist, low-status was equally adept in both skills are often undervalued legitimacy and illegitimacy epitomise the classic rags We coded cast credits, the Chinese actors enhanced historical and contemporary or even discounted in their of emerging industries, and to riches story. But besides year of release, names of their status in Hong Kong films. Ultimately, it helped adopted land. In the creative movie actors’ career paths. “hard work pays”, there are directors and studios that compared to specialist com- that he was active in action and innovative industries at Wan Li is an Assistant deeper lessons to be learned, made the films, and the patriots. But this happened and patriotic film genres, least, such versatile migrants Professor of Management at especially in the creative and genres. The year a mainland only if the generalists previ- which are popular in both can rise in society to a level the University of New Bruns- innovative industries. They actor first appeared in the ously performed in catego- mainland China and Hong they never attained back wick. Her research focuses are detailed in our new pa- credits of Hong Kong movies ries in China that were also Kong, and was not averse to home. With the right condi- on networks, strategy and per, “Can you do kungfu and following prior appearances popular in the host market. dabbling in Hong Kong-style tions and mindset, migrants sustainability. also act? New entrants’ status in mainland ones was con- Versatility and diligence pay comedy. may be able to turn their attainment in the creative sidered the year she moved off when they are appreci- foreignness into an asset. industries”. to the city. ated and suitably exploited Asset of foreignness Andrew Shipilov is a Pro- We analysed the experi- We computed the Chi- for new creative possibilities Generalist migrants, it fessor of Strategy and the ence of Li and some 1,200 nese actors’ status in the in the host market. would appear, make for at- John H. Loudon Chaired mainland Chinese actors “This article is repub- mainland movie industry Jet Li offers a great case tractive hires into teams Professor of International lished courtesy of INSEAD who migrated to Hong Kong and the Hong Kong actors’ study. Li began his career involving high-status incum- Management at INSEAD. He between 1927 and 2012. Knowledge(http://knowl- status in the Hong Kong acting in a series of mov- bents. The breadth of their is academic director of the edge.insead.edu). Copy- We found that migrants industry, as well as status in ies about Shaolin monks foreign skills, knowledge and Managing Partnerships and of low status tended to at- right INSEAD 2020 BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 16 EXECUTIVE KNOWLEDGE SERIES In Association with MARKETING David Dubois

HE INDUSTRY IS SET TO BECOME less cyclical, less vicarious and Tmore transpar- ent. If Covid-19 hasn’t killed them, fashion brands throughout the world will have experienced an unprec- edented slowdown since the start of the pandemic. Amid fashion show cancellations, Boston Consulting Group es- timates that this year’s sales will decrease by 30 percent versus that of 2019, and by up to 15 percent in 2021. In the case of luxury fashion brands, Bain estimates sales will drop by 60 percent in Q2 and by 20-35 percent for the full year. Fashion staples Neiman Marcus, J. Crew, JC Penney, Ascena and Lucky Brand have all tipped into bankruptcy. Beyond Covid-19: Remodelling From a consumer per- spective, social distancing has been accompanied by a greater willingness to con- the Future of Fashion sume green and to consume local. Together, these chang- think about the waste, and ticity – rather than showing The expressive value of lux- their production cycle, As fashion becomes less es converge to profoundly the amount of money, and off in the traditional sense. ury is retreating from con- thereby increasing both au- cyclical, less vicarious and remodel the future of fash- consumption, and excess This kind of value-based sumption while invading the thenticity and transparency more transparent, brands ion. We expect the industry that we have all indulged signalling speaks louder production process. in the eyes of consumers. need to use the reach and to become less cyclical, less in”. than an advertisement. It is In response, some brands In 2017, fashion designer depth of digital to make a vicarious and more trans- better for the watch to be an have already made product, Martine Jarlgaard launched difference and build their parent. Less vicarious fash- insider secret than splashed production and brand ex- a blockchain-verified col- own voice in today’s turbu- ion on the wrist of the latest in- perience more transparent. lection at London Fashion lent times. More than in the The end of cyclical fash- Fashion has always fol- fluencer. For instance, pioneers such Week. Diamond retailer Bril- past, they can raise funds for ion shows lowed power and espoused as People Tree, Filippa K, liant Earth has a selection of causes and choose whether Since the dawn of the effective and widespread Value through transpar- Kings of Indigo, Armedan- diamonds for which custom- and how to take position 20th century, fashion brands signalling. In the last centu- ency rather than scarcity gels, Nudie Jeans, and even ers can see the place of origin on important issues, such have shared their creative ries, clothing as validation Demand for production sports brands like Patago- and manufacturing process. as the Black Lives Matter innovations and reinforced of one’s identity and status transparency, right down nia, have long enabled their LVMH, Microsoft and Con- movement. Being purpose- brand image through highly has been at the heart of con- to the leather craftsman customers to peek into the sensys have created Aura, a driven increasingly requires ritualised interactions. A spicuous consumption. In behind the pumps, is on the workings in their factories platform using blockchain brands to take a stand on prime example is fashion this age of social distancing, rise. Consumers seek con- and offices. Armedangels to track product history from society’s most contentious shows. Each season, such remote working and more spicuous production – a tool has been working on its “Cot- raw materials all the way to and pressing topics, even at shows preview collections digital than face-to-face en- for them to show off their ton in Conversion” project, the second-hand market. the risk of alienating some nine months ahead of ac- gagement, the very premise knowledge. The post-Covid persuading farmers in India As such, blockchain is also customers. tual delivery for an audience of fashion as a visible marker aspirational class will also to move from conventional complementary to building Consumers will be quick flown in from around the of status, wealth and style is turn away from anything cotton to organic cotton. a circular economy supply to spot greenwashing when world. The presentations losing its currency. Perhaps resembling standardisation. Eventually customers may chain. a firm’s actions do not match take months of preparation it still exists in a diluted form Some luxury brands are ex- know the exact cotton field Emphasise consumer-led its words, so authenticity but last for no more than 20 when one, say, wears an perimenting with this, an their organic t-shirt origi- digital content. Everyone is a and sincerity are critical for minutes. expensive watch on a Zoom example being Mulberry’s nated from. creator and an individual is a espousing a cause. Brands Covid-19 brought a sud- call, but conspicuous con- latest “sustainable leather” reflection of a brand’s values. have proven that they can, den end to these forms of sumption may be past its bag collection. LVMH de- Organising the fashion By embracing this bottom- in times of crisis, change interactions costly for the en- Golden Age. clared sustainability to be house of the future up approach, fashion must and adapt quickly. Count- vironment. It moved Shang- To survive, fashion a must-have for this year’s Change the value chain allow communication to less big and small brands hai, Russia and now London brands will need to invent LVMH Prize for designers into a circular chain. Every be truthful and direct. How have pivoted production to fashion weeks online, while other forms of signalling. as well as its commitment year the fashion industry many times have you read manufacturing masks and inspiring brands from Dior Pre-Covid, consumers were to full traceability of all its uses 93 billion cubic metres a sponsored post from an disinfectants. Luxury brands to Burberry to launch “au- already turning towards new raw materials by 2025. Some of water – enough to meet the “influencer” and wondered have always been about val- dience-less” staged fashion forms of expression, such as may say this is lip service, but needs of five million people. how much he or she got ues. It’s about time they start shows, digital campaigns experiential consumption it is still a step in the right The overproduction and paid to publish it, instead moving from symbolising and even a fashion film. in dining and travel. With direction. subsequent destruction of of actually admiring the them to fully embracing and Brands will also need to re- less travelling, brands need While “fashion excur- deadstock by luxury, fashion brand and product? How acting on them. think “drops” – the tactic of to look for novel ways for sionists” may continue to and even sports brands is no many times have you seen launching their collection customers to experience value consumerism and longer a secret. Brands need a fragrance advertisement in a myriad of small, hyped- the brand, whether digitally materialism, members of to do more to reduce wast- featuring a gorgeous woman David Dubois is an Asso- up doses. It is likely that this or in person. In particular, the new elite prefer getting a age and maximise resources. running in a ball gown, and ciate Professor of Marketing expensive signalling may not new forms of fashion may top education; accumulating Reducing carbon footprint felt more disconnected than at INSEAD. come back. emerge within inconspicu- cultural capital (i.e. knowing calls for a change to the en- inspired? There is a fine line The fashion industry will ous consumption, which the latest vegan recipe on tire production and product between trying to convey an Debbie Teo (INSEAD MBA need to turn to other forms emphasises practices rather NYT Cooking or reading this cycle, launch timings and experience and being plain ‘12J) is the Head of E-Com- of outreach while using less than objects. year’s Man Booker Prize); markdowns. In this spirit, detached from the customer. merce at Armedangels (cur- product, energy, resources Fashion brands must re- buying organic avocados at e-commerce giant Farfetch The aspirational class wants rently on maternity leave). and manpower. Even Vogue earn “cultural capital” in farmers’ markets and send- recently launched a sustain- to earn cultural capital for Editor Anna Wintour seemed order to continue to attract ing their kids to yoga class. ability calculator for every itself, not for others. Digital is to approve of the recent consumers. Culturally-rich They tout environmentally product on its platform. the vehicle to do so. “This article is repub- cancellation of the Met Gala, “aspirational” consumers friendly products; support Blockchain as the back- lished courtesy of INSEAD suggesting it was “an oppor- tend to thrive on gaining small and local businesses; bone? Blockchain technol- Think broad. A brand is Knowledge(http://knowl- tunity for all of us…to rethink superior knowledge, con- place renewed priority on ogy can help brands provide a way to make a political edge.insead.edu). Copy- our values, and to really noisseurship and authen- education and well-being. more information about statement. right INSEAD 2020 more than banking BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 EXECUTIVE KNOWLEDGE SERIES In Association with 17 INNOVATION minister, the leaders of the g0v collective); trust and residual goodwill (among the g0v community, and be- tween the citizens generally and the government, which had recently obtained a very strong electoral mandate); deep preparation and steady, highly competent, informed leadership by the govern- ment that welcomed the g0v contributions; a well-edu- cated, highly skilled group of techies with the freedom and capacity to contribute without being paid for their services; and a general, cre- ative openness to diverse people and ways of thinking (including enlisting volun- teers to visit pharmacies in person and collect addi- tional data). Above all, the success of this case relied on many volunteers willing to con- Taiwan’s Tech-savvy Citizens tribute large amounts of their time and effort. As writer Andrea Randall put Helped Flatten Its COVID-19 Curve it so well, “Heroes don’t al- ways wear capes, badges or AIWAN’S GOV- to assist in the pandemic re- tions, three chat bots, 23 the government’s stance in Hell. Her chronicle be- uniforms. Sometimes, they ERNMENT CAN- sponse in Taiwan. That work mask sales location search towards data availability. gins with the San Francisco support those who do.” In a NOT take sole has culminated, so its story systems, 22 apps, five audio earthquake of 1906 and the time of immense challenge, credit for flatten- can now be told. Our case systems, two information Persistent Key Mem- acute firsthand observations each contributor became a ing that country’s study is based on 3,060 on- sharing systems, and one bers of the philosopher William hero in his or her own way. T line community messages, online mask reservation sys- The channels used by the James, who noted the initial Not only did they help solve curve during the early days of the coronavirus pandem- 32 online shared interviews tem were launched. Several g0v community (#general effective and peaceable self- the problem, but they also ic. The work was supported and information from sev- applications have attracted and then #covid19) had per- organization of response by warmed everyone’s hearts by an extraordinary collabo- eral personal contacts. See more than 2 million users. sistent, attentive members. the diverse citizenry. Sadly, with their effort and generos- ration of tech-savvy citizens “Not All Heroes Wear Capes: The tools have been very ef- In the development of the that period of comity and ity. The gratitude they merit who used their expertise to The Contributors Behind the fective, easing public anxiety mask-searching system, sev- effectiveness soon ended is perhaps even more for the help spread valuable infor- Battle Against the Corona- and preventing a black mar- eral leaders responded to the because authorities imposed lasting value and example mation to the public, accord- virus Outbreak in Taiwan” ket from emerging. As Micro- community multiple times force where it was hardly they created for the future, ing to a case study by Steven for a fuller version of the soft executives Jaron Lanier every day. The top three needed and, in fact, detri- and what this means for O. Kimbrough, Wharton pro- study, including a detailed and E. Glen Weyl wrote, members’ IDs were kiang, mental. Solnit found this to Taiwan’s social capital, than fessor of operations, infor- timeline. “These tools showed where minexo79 and tnstiger, all of be a recurring pattern up to for their fine achievement of mation and decisions, and The basic facts of the case masks were available, but whom steadfastly replied to the present day. the day. Christine Chou, business are the following: Ration- they did more than that. Citi- channel members’ messag- Happily, Taiwan so far *The authors acknowl- professor at National Dong ing of face masks began zens were able to reallocate es, and continue to do so. has been an exception. In edge the help and autho- Hwa University in Taiwan. in Taiwan on January 28, rations through intertem- this case, the government rization from CC BY 4.0 by In this opinion piece, Kim- shortly after the coronavirus poral trades and donations Openness of Govern- responded with welcome g0v Contributors and help- brough and Chou explain appeared. This was partly in to those who most needed ment Data and alacrity to the pro-social ful comments from Finjon how this grassroots effort response to panic buying, them, which helped prevent Thanks to the univer- impulses of the g0v commu- Kiang. coalesced and what it signals but problems persisted, with the rise of a black market.” sal national health system, nity. Audrey Tang, the gov- for Taiwan’s future. long lines at all convenience In the end, democracy and the Ministry of Health and ernment’s digital minister, When the novel corona- stores that were originally social capital in Taiwan were Welfare had complete data has been a linchpin. With virus and its disease, CO- designated to sell masks. strengthened. available on pharmacies expert skills and knowledge VID-19, first spread in China, There was also much agita- The rationing system and around the country. That in information technology, Taiwan was regarded as the tion and anxiety among the the searching tools fully met data included pharmacists’ and the political skills that next country most likely to public. At this point the idea their expectations until late store codes, locations, busi- come with holding an im- be affected, due to its close of a name-based rationing April when the government ness hours, mask inventory, portant position in the geographic and economic system — tied to the national was able to produce ample and ways of issuing numbers government — a rare com- ties with China. However, health system records — for numbers of masks domesti- to distribute the masks. This bination — she actively by mid-July 2020, after more buying face masks in the cally. The government began data was made available to supported the projects than six months of rapidly pharmacies was proposed. to donate masks to various the g0v developers after they and served as a crucial go- growing COVID-19 cases Under the system, each citi- countries in need beginning requested it. between for the multiple around the world, Taiwan zen or foreigner with a valid in early April and was able stakeholders present. An still counted substantially alien resident certificate to accumulate uncollected Emotion Sharing exceptional talent, she is fewer cases than most coun- could purchase two masks masks to donate more to The g0v community also openly a transgen- tries. The worldwide news within a 7-day period using other countries in late April. shared frustrations among der woman who, remark- media have noted Taiwan’s their identification cards as There are several important its members as the project ably for Taiwan’s historical initial success story, attribut- of February 6. lessons to be learned from got underway and elation culture, has achieved the ing it to Taiwan’s resilience, Once news of the forth- this case: as successes were achieved. highest levels of access and pervasive national health coming arrangement was Emotion sharing was a key influence in government system, central command released on February 4, a An Existing Platform element in binding the com- and society. Her voice is structure, rapid medical novel collaboration among The software commu- munity together and serving eagerly sought and listened equipment build up, early the public, private and civic nity coalesced on the g0v.tw its higher purposes. to. See “How digital inno- prevention and transparent sectors began to emerge platform, which is “an online Stepping back, we should vation can fight pandemics information sharing, as well spontaneously. More than community that pushes for see the generous behavior and strengthen democ- as other factors. While these 1,000 software developers greater information trans- of the g0v community in a racy” for Tang’s broader factors surely have played joined in the task of provid- parency [and] that focuses larger context. It is an exam- take on the situation. important roles in contribut- ing apps and other tools to on developing an informa- ple of people spontaneously The success of the ing to this initial success, it is identify in real time where tion platform and effective coming together in the spirit name-based mask proj- too soon to tell whether that face masks were available, related tools for citizens to of community service during ects was enabled by an success will continue. sparing the public wasted participate in society.” This a public disaster. Rebecca unusual combination of The purpose of our case time and anxiety. By the platform was first set up in Solnit documented mul- elements including: out- study is to describe the work beginning of March, 59 map 2012 when a group of engi- tiple such examples in her standing leadership and by a special group of people systems, 21 line applica- neers was not satisfied with 2009 book, A Paradise Built commitment (the digital more than banking BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 18 EXECUTIVE KNOWLEDGE SERIES In Association with MARKETING

that kind of model, and uring that out. And again, also just the general ease there are new companies The High Cost of Returns: Should of returns, impact supply appearing in this middle chains? ground to handle backward supply chains. Retailers Rethink Their Policies? Robertson: Again, this is part of the developing con- Knowledge@Wharton: Shoppers love the kind of liberal return policy that makes it it.” In my case, they said, Robertson: Those are sumer behavior. We may In what way are return poli- easy for them to buy whatever they want in store or online with “We’ll give you half off if really difficult decisions, be training consumers to cies affecting brand reputa- the confidence that a retailer will take products back without you keep it.” We said, “No, and very often it’s left to the return. It’s companies such tions? hassle. But retailers are starting to rethink this strategy as they we don’t want it at all. Come sales clerk in the store. So, as Zappos or Stitch Fix or Robertson: Your return are confronted with rising financial losses from returned mer- and take it back.” Obviously, you get inconsistency in it Warby Parker, where the policy helps define you as chandise and the headaches that come with figuring out what they did not want to take it all, which is a big problem. expectation is that you’re a retailer. If it is fair and to do with all that stuff. A recent study found that roughly 10% back because they didn’t What’s a dark side — or going to order and return. equitable and consistent, of purchases are returned, adding up to billions of dollars a know what they were go- what’s unacceptable — de- Let’s take Warby Parker, that may very much be to year, with online returns higher than in-store. ing to do with it. This was pends on who you ask. in particular. I think they your benefit. If consumers Wharton marketing professor Thomas S. Robertson thinks it’s a piece of furniture. But We did a little study when let you order five pairs of perceive it to be unfair or an area that is ripe for research. He explores the topic in a pa- by the time you take it out we were at a conference. We frames, and you buy one inconsistent, that may be per titled, “Many Unhappy Returns: The Changing Nature of of the crate, can you get it were able to interview our and return the rest. Stitch damaging to your repu- Retail Product Returns and Future Research Directions,” which back in one piece? So, the students — undergrads Fix has a little bit of a dif- tation. Another potential he co-authored with Ryan Hamilton and Sandy D. Jap, both return journey is difficult and MBAs combined — ferent model, curating for damage is in the area of from Emory University’s Goizueta Business School. Robertson, for retailers. and we were able to inter- you and sending you things sustainability. Retailers, a former Wharton dean and current faculty director of the Jay view retailers who were at with the expectation that particularly in the fashion H. Baker Retailing Center, said return policies are critical to Knowledge@Wharton: this conference. It’s not a you’ll keep some of them and clothing area, have building brand reputation and customer loyalty, but they have How are returns transform- scientific study; it’s really and send most of the rest tended to dump unused to be carefully crafted so they don’t become burdensome to the ing the customer jour- rather impressionistic. But of it back. merchandise to some ex- company. It’s a conundrum he described as both an opportunity ney? what we found was that the In a sense, this is part of tent. Some of it goes to off- and a curse. He spoke about it during a recent interview with Robertson: The custom- two have different views, returns, and we’re sort of price channels and so forth. Knowledge@Wharton. er journey is really chang- particularly in the middle. training consumers that, And some of it gets dumped ing. We’ve had the notion You can agree that there yes, maybe the decision is into landfills. There are An edited transcript of the conversation appears below. of purchase journey or are some returns that are made at home and not in statistics around how many customer journey with us probably OK, such as it was the store. As a consumer, tons of clothing wind up in forever, going back a hun- the wrong size, and there if you come to expect this, landfills per month, and Knowledge@Wharton: these are some of the re- dred years, which was at- are some returns that are then retailers have to re- that is a concern for many In your paper, you write, sponses that retailers are tention, interest, desire, ac- illegal, such as you can buy spond. And more and more, of us who are worried about “The sheer magnitude of making. Potentially the tion (AIDA). I think anyone a sales receipt, and then you they may have to move in sustainability. It’s also a product returns should give most important is that re- who has studied marketing go into the store and find this kind of direction. reputational concern for anyone interested in retail tailers may be able to de- probably came across AIDA. that item and try to return luxury brands. If they take a pause.” What are some of velop better analytics so Over the years, it developed it. You never bought it. You Knowledge@Wharton: things back, what do they the emerging trends with that they have risk scores into more elaborate models never owned it. You paid Does it affect inventory do with them? They can’t product returns that you as to which consumers that would vary by product some amount of money for when stores need to have an let the merchandise go out are seeing in the retail land- are likely to return and category as to how purchase this fake receipt. enormous number of sizes and reach broader market scape? which consumers are likely decisions were made. It Those are the two ex- or styles to send out, and segments, because if you’re Thomas S. Robertson: I to return too frequently. might be routinized and tremes. What gets interest- then most of that comes paying a lot of money for think this is an interesting Supposedly, Amazon has be a fairly simple model — ing is in the middle, and back? one of these brands, you area for retailers. [Returns] canceled accounts for ex- maybe buying a new cof- wardrobing is a really good don’t want to see someone tend to be ignored. Over cessive returners, so how fee pot or something like example. This is the idea Robertson: Supply else on the street with it time, retailers just thought much further does this go in that. But I was talking with that a man would buy a chains work very well go- who has been able to buy it they were an irritant and terms of denying returns to one of our Baker Retailing suit, a woman would buy ing forward. Of course, off-price someplace else. didn’t think strategically consumers? For the retailer, Center companies in the a dress, and you tuck the that’s not totally true. In For luxury brands, what about them. But now with it is an opportunity. I think stroller business, and I was labels in as you go to a fancy the women’s fashion indus- do you do? For a while, there returns amounting to at it’s an opportunity, but it’s surprised how complicated event. Then you return it try, the brands get it wrong was burning going on. The least 10% of total retail sales, also a curse. that gets. First of all, the and say you never wore it. about half the time as to idea is that it’s better to I think returns have come purchase journey is very In the study, students were what’s going to sell. And burn it than to let someone into the forefront. There are Knowledge@Wharton: high on information search. likely to think that this was part of that is the supply wear it who’s not in your a number of trends that are In your paper, you note These young parents study OK, but certainly not the chain is too long. It’s nine market segment. But I think underway. The major trend that 10% of retail sales were it a lot. What’s the right retailers. Students were months to get things from there has been such a reac- is at the consumer level. returned in 2018. That’s kind of stroller to get for likely to think that buying a Asia, so you forecast sales tion to that, that I’m not Consumers are coming about $369 billion, which my darling baby? Secondly, textbook, copying the little upfront, and by the time sure what exactly they’re all to expect they can return is astounding. How is this it’s very often a gift, but the bit out of it that you needed that season rolls around doing these days. things, and that it will be a developing opportunity brand is determined by the and then returning it was and the merchandise easy. They’re coming to and not just a curse? young parents and not by OK — but certainly not the arrives, consumer tastes expect that returns will be Robertson: Yes, the curse the grandparents or the textbook publishers. There’s may have changed, col- free, that when something is is easy to understand, isn’t aunts and uncles or who- really a continuum of the ors may have changed, delivered to them, there will it? The opportunity is that ever else might be making dark side, going from what’s whatever. be a return label or return there is evidence that han- the actual purchase. probably absolutely OK to But in terms of your envelope for sending things dling returns well builds The purchase journey what’s absolutely illegal. All question on supply back. There is this major loyalty at the consumer lev- is changing, but in this kinds of interesting ques- chains, it’s good going upward trend in terms of el. There’s also the idea that new world of returns, we’re tions are in the middle as forward, and it doesn’t consumers returning and if you can get consumers to finding that the purchase to what you do about it. work very well in reverse. expecting to return. the store to return, you can decision that you think is In the wardrobing ex- Going forward, it’s sort For the retailer, this be- sell them additional mer- made in-store may actually ample, are you going to give of routinized. We know gins to raise some issues. chandise. And there’s the be made at home. At that your sales clerk the ability what we’re doing, and How should you respond, point that you may be able point, the consumer stud- to check for any potential we’ve got all of the inter- and how much should you to change it from a return ies the merchandise and wearing of the item, de- mediaries lined up to do respond? What we’re seeing to an exchange. Retailers either keeps it or returns it odorant marks or smelling it. But going backwards, also is a number of interme- are moving in some of these or exchanges it. Retailers of cologne or whatever? as a consumer returns diaries entering the space. directions. are now recognizing that Retailers are struggling with things to the store, it’s We see companies that will The downside is that there’s often this stage — at that middle ground. We’ll idiosyncratic as to what’s take over the return func- it’s really costly to handle least 10% of the time — in agree on the easy part. We’ll being returned. It’s irreg- tion for the retailer. We see returns — and it’s not just the purchase journey. In agree on the illegal part. But ular, and irregular pro- some department stores, the shipping. Can you put some product categories, the middle ground is caus- cesses are expensive. It’s such as Kohl’s, which will it back into inventory, or it’s more than 10% of the ing a lot of problems. expensive for the store to do returns for Amazon. does it have to go to off- time. take things back, again, Even Nordstrom in New price channels? Special- Knowledge@Wharton: not just in terms of the York was experimenting ized firms moved into this Knowledge@Wharton: There are companies that freight. Can you put it in with accepting returns for space that will take returns You also talk about the “dark have built returns into their the inventory, or do you Macy’s, which is kind of off the retailer’s hands. You side” of returns. What kinds business models, such as have to go to off-price interesting. often see that something of returns are acceptable, Zappos. You can order three retailing or sell it to an New intermediaries gets delivered, and it’s not and which ones are not? or four different sizes of intermediary? Forward coming in, new drop-off what you expected, and the How do retailers find the shoes, and they expect you is great. Backward, we’ve points for consumers — retailer says, “Oh, just keep line on that? to return them. How does got some work to do fig- more than banking BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 INSURANCE BUSINESS 19

Security P.Close Open High Low Close % Change Volume Value 52Wk High 52Wk Low % Change Ytd AFRINSURE 0.20 0.20 0.20 0.20 0.20 - 655,959 131,192 0.20 0.20 0.0% AIICO 0.90 0.90 0.92 0.90 0.91 1.11% 6,226,895 5,612,958 1.22 0.61 26.4% CORNERST 0.58 0.58 - - 0.58 - 2,700 1,431 0.68 0.17 28.9% LAWUNION 1.00 1.00 - - 1.00 - 190 200 1.22 0.37 100.0% NEM 1.87 1.87 - - 1.87 - 51,350 105,268 2.42 1.44 -22.7% ROYALEX 0.26 0.26 - - 0.26 - 22,055 5,313 0.33 0.20 -13.3% SOVRENINS 0.20 0.20 - - 0.20 - 22,727 4,545 0.22 0.20 - Quoted Insurers Quoted FINANCE & INVESTMENT and insurance density in INSIDE INSURANCE Nigeria have remained Investigate before you invest embarrassingly low over many decades despite the expansive size of our econ- into alleged payment of ly, that many insurance NAICOM, now introduced violators of the insurance omy while capital flight re- premium for non-existing policyholders (custom- the Capital Verification ex- laws and their accomplices, mains the fate of premium assets and abuses of pro- ers) do not get their policy ercise, which is scheduled if truly the purpose is to generated due to the lack cesses for the appoint- documents when they have to start mid-September. As ensure genuine investors of capacity in the local ments of insurance com- bought Motor Comprehen- you may know, one of the have the opportunity and market. Only serious and panies and brokers on sive Insurance; only the setbacks of the last recapi- the business of insurance is well governed insurance certain government ac- Certificate of Insurance is talization exercise carried conducted in line with the institutions with excellent counts, while on the other given after payment of pre- out in 2007 was the failure ethics of the profession and response management EKERETE OLAWOYE hand, the Commission has mium. Unfortunately for a to conduct Capital Verifi- laws of the country. system to the issues of cus- taken the bold step to con- journalist who was in such Previously, insurance GAM-IKON, MNIM, CPP cation and ascertain that, tomers can work on these Consultant duct Capital Verification in situation, he had a claim indeed, the insurance com- companies and CEOs al- problems as opportunities Management~ ALL insurance companies and the Insurer informed panies had the funds they leged to have been involved and change the narratives. Strategy~Insurance before the expiration of the him of their position and he claimed to have as Capital in financial crisis were not Healthy competition M:+234-806-648-1111; first recapitalization dead- could not refer to the terms Base in fulfilment of the re- prosecuted while NAICOM +234-802-585-0344 amongst such insurers line for end of December of his contract with them quirements of the law. took over the companies for the mind of our youth this year. because he did not have At that time, it was so and they have remained populace with the right These actions are “dou- copy of the policy docu- bad that some insurance under its management and HE FIRST TIME products and environment ble trouble” for most insur- ment. companies did not even ac- regulatory order showing rather than continued un- I HEARD this ance companies but would The appropriate step for cess the funds raised from no improvement as the re- phrase was in an professional conduct re- necessarily serve the inter- any insurance transaction the capital market due to capitalization process goes garding insurance of the entrepreneur- ests of new and existing in- to be closed is the issuance the global financial crisis on. This is another neces- ship programme assets of governments vestors and policyholders. of the policy document and have had to struggle sary subject of investiga- would be the most wel- andT I thought the facilita- The pieces of informa- (contract) by the insurer to to survive until now. Little tion to ensure investors are come development. If our tor was trying to use nice tion coming out to the the policyholder, who does wonder, some have had to not misinformed and mis- words to draw our attention youths are not embracing public space about the not need to ask for it, in accept certain conditions led to invest in “non-exist- insurance as an instru- to something important. handling of transactions line with the first principle from agencies of govern- ing entities”. If I was right, then recent ment for effective personal and the recapitalization of utmost good faith. How- ment at Federal level to Hopefully, by the end financial planning, one can developments in the insur- process will help investors ever, weak governance and generate income, the al- of these investigative exer- ance sub-sector, under the almost predict what their have better understanding market misconduct have leged position the House cises by the House of Rep- future and that of the coun- supervision and regulation of how insurance compa- been responsible for the of Representatives is inves- resentatives and NAICOM, of the National Insurance try would be. nies generate income, how situations now being in- tigating based on petitions we will, firstly, know the Let us be optimistic that Commission (NAICOM), they spend and, probably, vestigated by the House of received from within the statuses of all insurance seem a significant attempt these twin investigations why most of them are un- Representatives. insurance industry. companies in Nigeria and shall lead to better invest- to rewrite the narration of able to honour their obliga- If anyone thought this The effects of these -ac importantly, determine insurance in Nigeria. ments and improved insur- tions to shareholders, sup- could be time wasting and tions from the legislative which should remain to se- ance experience in Nigeria. On one hand, the House pliers and even employees. distracting the race to- and executive arms should riously serve the interests of Representatives com- It has been quite dis- wards the recapitalization instigate judicial review of stakeholders. menced its investigations turbing to observe, recent- deadline, the umpire itself, and possibly penalties for Insurance penetration

wider coverage. What read- to use. The migration will re- The “Insurance today and the future” ily comes to mind here are duce human interface, elimi- Insurance Broker technology-driven channels nate submission of hard cop- industry in Nigeria. over backwards to meet cus- helps individual and corpo- of distribution like mobile ies of documents, automate Ogunlana has seen it all. tomers’ needs. But most im- rate bodies to plan for un- phones and apps. One of the business processes and ap- He regaled us with an inci- portant, he called for unity. certainties and we are in the reasons why the growth of plicants for insurance license dent in 1951. That was a year The insurance industry is in most uncertain of times. micro-insurance has been will now get real time update after the enforcement Mo- dire need of unity and baba Properly positioned, in- stunted in Nigeria is the re- on the status their applica- tor (Third Party) Insurance should know. Baba Ogun- surance industry can be a stricted nature of traditional tions, according to the com- Act of 1945 came into effect. lana spoke as the special stabilizing factor in these distribution channels. Tradi- missioner. Practitioners also He spoke of how he en- guest of honour at the Lagos precarious times. To achieve tional distribution channels expect a quicker turnaround countered a long queue of Chamber of Commerce and this, Thomas touched on are also not economical for time. people who had thronged Industry-organised Insur- some key areas which have distribution of micro-insur- Another critical area he an insurance office on ance Stakeholders Consulta- been acknowledged as criti- ance offerings. talked about is manpower FRANCIS Broad Street, Lagos, to get tive Forum. cal to insurance growth and Attempts by practitio- development. The practice of EWHERIDO their motor insurance so The insurance industry relevance. On insurance of- ners to introduce alternative insurance is getting more so- that they would not run is in need of change agents ferings, Thomas, said, “We mass distribution channels phisticated and diversified. Ewherido is the afoul of the law. Olola and game changers, and the have hitherto focused more in the past were frustrated Those currently in the field MD/CEO of Titan Ogunlana spoke of the glo- question on the lips of many on selling what we produce, by regulatory bottlenecks. need to update their knowl- rious days of insurance since the confirmation of Mr. rather than producing what Now, the National Insurance edge regularly, while upcom- Insurance Brokers when the entire financial Sunday Thomas as the Com- we can sell. What he was Commission, the insurance ing professionals need to be Limited system, including banks, missioner for Insurance is, is essentially saying was that industry regulatory body, is properly trained and men- revolved round insurance. he going to be a change agent product offerings must now coming up with a Regulatory tored. May be, it is also time (SINGING) “WE ARE Until recently, when uni- and a game changer? Time be based on what the insur- Sandbox Operation in Nige- to look at the curricula of the BETTER TOGETHER, we are versal banking licenses will tell, but the early signs ing public needs, not what ria. “The sandbox will afford various institutions where bigger together, we are stron- were revoked, banks now are good. His plans to move practitioners think they the opportunity to test busi- upcoming insurance pro- ger together, we are safer to- owned insurance compa- the industry forward have need. The role of research ness models, products and fessionals are trained to see gether, we are fuller together, nies. Today, the insurance been received with a good and development (R&D) and services, that will enhance whether they are in tune with we are richer together, we are contribution to the gross degree of optimism by many strong R&D departments in efficiency in meeting con- modern practices and re- greater together…” That was domestic product (GDP) of insurance industry players. insurance underwriting and sumer needs in a less regu- alities. Thomas encouraged Olola Olabode Ogunlana, Nigeria is less than one per He spoke briefly on some of brokerage companies come lated environment,” accord- the Chartered Insurance In- the doyen of insurance in Ni- cent, as he rightly observed. his plans at the forum, titled to mind here. ing to Thomas. Practitioners stitute of Nigeria, which is geria, singing a song he said For someone, who has “Insurance today and the fu- Thomas also spoke about are waiting anxiously for its saddled with the responsibil- boardroom guru, Michael been in the industry for ture.” insurance distribution chan- commencement. ity of organising professional Omolayole, used to sing for over 60 years, he knows the The commissioner ac- nels, which are currently Another piece of infor- examinations, “to maintain them. The 88-year-old elder insurance industry is just a knowledged the current grossly inadequate for an mation that gladdened the the required consistency in statesman and insurance sleeping giant. What with difficult economic circum- exponential growth of the hearts of practitioners is the the review of the curriculum icon’s voice was firm and insurance penetration still stances, but stressed that the industry. “The use of tradi- proposed migration to tech- in order to address emerging belied his age as he sang at 0.3 per cent. Baba Ogun- insurance industry must be tional distribution channels nology-based supervision. A risks. It looks like the insur- and when he spoke, but that lana called on the industry repositioned as a key driver now require complemen- new portal, which will serve ance industry is in for inter- was not the issue. The song to be problem solvers and of the economy for sustain- tary alternate channels, if as an interface, has been de- esting times. speaks volumes about the solution providers. He also ability and growth. And why we must achieve spread and veloped and will soon be put current state of the insurance urged practitioners to bend not? Insurance basically BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 20 FINANCE & INVESTMENT

MARKET COMMENTARY FOR THE WEEK ENDED 21TH AUGUST, 2020 CAPITAL MANAGEMENT LIMITED July inflation rises to 12.82% y/y What shaped the past due to reactive measures Sector saw the index gain Currency: The Naira re- ing in a positive manner to y/y to N10.9 billion, with week? against the pandemic and 81bps w/w. In the Indus- mained unchanged at I&E kick-off the week. operating margin com- relaxation of inter-state trial Goods sector, waning FX Window at ₦386.00 and Currency: We expect ing in flat y/y. In keeping Global: - The lockdown. Imported food interest in the space saw while depreciating ₦2.00 the naira to remain largely with their debt restructur- Covid-19 pan- inflation (16.35% y/y) sus- the sector shed 41bps, as to settle at ₦474.50 against stable across the various ing strategy, management demic remained tained an uptrend since loses in DANGCEM (-71bps the dollar in the parallel windows of the currency refinanced N30 billion via in investors’ focus last week August 2018 due to continu- w/w) weighed on the sector. market. space as the CBN maintains commercial paper in April. as markets closed lower ous border closure, recent Finally, the Oil and Gas sec- interventions in the FX Accordingly, net finance across the globe. European exclusion of maize from the tor lost 92bps w/w, driven What will shape market. costs fell 29% q/q (+7% markets were mainly pres- official forex window and by losses observed in CO- markets in the coming y/y) to N4.9 billion. After sured by fears of a second depreciation of the Naira. NOIL (-976bps w/w) and week? Focus for the week accounting for tax, PBT and wave of the virus with Ger- The Housing, Water, Elec- OANDO (-524bps w/w). Equity market: The FLOUR MILLS OF NIGE- PAT both grew 17% y/y to many announcing that they tricity, Gas and other Fuel For the week, volume and week was largely domi- RIA PLC - Earnings tamed ₦6.5 billion and N4.4 billion would retain containment inflation (7.97% y/y) rose value traded eased 28.33% nated by the Bulls as savvy by FX revaluation loss respectively. measures given concerns to a 30-month high in July and 27.34% on the week. investors again took advan- worsened by the rise in co- due to the upward review of tage of cheap valuations Growth spurt in Agro- Increased growth ex- vid-19 cases. Furthermore, the price of petrol towards Fixed Income: The fixed in the Insurance (+4.40% allied business sustains pectation weighed down statements from the VP of pre-COVID level. We expect income space traded in a w/w), Consumer goods Revenue growth in Q1. by FX losses the European Central Bank, inflation to rise by 23bps in relatively mixed manner (+1.88% w/w) and Banking Flourmills Nigeria has Following the gradual Louis De Guindos, stating August to 13.05% anchored this week, as we observed (+0.81% w/w) sectors. We released its Q1’21 results, relaxation of lockdown that the lenders in the re- on higher transport costs as limited interest and sell- expect the level of bargain continuing with positive measures across the coun- gion would continue to face well as higher fuel prices, offs throughout the week, hunting activities to con- momentum from the last try, we are slightly optimis- pressure in 2021 as the from on the back of social dis- notably in the bonds space, tinue in the Banking sector financial year. The firm’s tic of merely a mild slow- the recovery from the pan- tancing policies and energy as investors remained con- next week, as investors topline performance came down in aggregate income demic is expected to fully reforms. cerned about the impact of continue to take position in line with our growth levels (although we still kick-in in 2022. Sentiment Equities: The local the pandemic on the coun- ahead of interim-dividends expectation, expanding maintain that income levels in American markets were bourse closed marginally try’s earnings. In the Trea- declaration. Also, with the 15% y/y for the quarter would remain somewhat also dampened following higher this week, gain- sury bonds space, yields gradual opening of social to N154.8 billion (Vetiva: depressed) and even ex- the release of minutes for ing 9bps w/w, as contin- on benchmark bonds ad- activities in the country, N152.8 billion). We believe pect an uptick in consumer the U.S. Fed Federal Open ued buying activity in the vanced 7bps w/w, driven we expect shares in the this growth is as a result demand in the second half Market Committee (FOMC) Consumer Goods space by sell-offs at the short- Consumer goods sector to of sustained rewards from of the year. We marginally meeting in July. The bank drove gains in the mar- long end of the market. be positively patronized in favourable border controls, adjust our FY’21 Revenue highlighted the need to ket. The Consumer Goods Meanwhile, in the Treasury the coming weeks. which has proven a signifi- projection in line with the implement more accom- space gained 188bps w/w, bills space, yields eased on Fixed Income market: cant tailwind to demand for Q1 performance and esti- modative monetary and with buying interest in IN- OMO eased 52bps w/w on We expect the improve- its edible oil segment and mate a 9% y/y growth for fiscal measures in order to TBREW (+26.32% w/w) and average, while advancing ment in system liquidity to its agro-allied business the full year (Previous: 7% protect jobs. Meanwhile, UNILEVER (+11.60% w/w) 9bps w/w as investors ex- spark some level of buying segment as a whole. While y/y) to N624.8 billion. We on-going tension between propelling the index higher. pressed limited interest in activity in the fixed income we expected the pandemic- also adjust our Gross mar- the U.S and China weighed Meanwhile, limited inter- the space, over the course space, following this week’s induced lockdowns to have gin expectation to reflect on investor sentiment est across a broad range of the week. OMO maturities. As such, had some mild impacts on the impressive Q1 perfor- in the Asian region. The of counters in the Banking we foresee the market trad- the domestic Agriculture mance and project a 3ppts Trump administration had sector, feed and fertilizer increase to 14% for the full announced that they would sales still expanded a re- year. Additionally, we tame be intensifying the restric- markable 29% y/y. Flour- our Opex forecast slightly tions laced on Chinese tech mills’ food segment also to N34.4 billion following giant Huawei, they have performed better than our management’s impressive stated that they are looking expectations this quarter, cost management in Q1. into measures that would despite our expectation of Adjusting for the operating prevent more Chinese apps reduced consumption of FX losses, we project a 34% from working in the U.S. packaged staples amidst a jump in EBITDA to ₦74.2 However, the week closed moderation in consumer billion and an expect EBIT with positive sentiment wallets. However, we be- to print at N48.6 billion. riding on improved system lieve that sales from the Although the company has liquidity after the People’s company’s newly intro- managed to restructure its Bank of China, through its duced value food brands loans given the low rates one-year medium-term helped offset the decline in environment, we revise our lending facility, injected high-end pasta, flour and finance cost expectation 700 billion Yuan into the ball-foods segment. Thus, (+14% to N22.8 billion) giv- economy. For the week, the food revenue expanded en the company’s intent to Japan Nikkei advanced lost 12% y/y. In the same vein, issue new bonds under its 158bps w/w, while the Ger- we saw a significant 12% current bond programme man DAX lost 111bps w/w, y/y expansion in sugar rev- in the next quarter. In all, with the U.S. Dow Jones enues despite a reduction we revise our projected having lost 36bps w/w as at in sugar import duties this PBT upwards to N28.9 bil- 1700 GMT. quarter. On a q/q basis, lion (+68%y/y) and esti- Group revenue expanded mate a PAT of ₦19.1 billion Domestic Economy: by 3%. (+68% y/y). We also revise On Monday, the National our target price marginally Bureau of Statistics (NBS) Foreign exchange loss- upwards to N25.55. With released Nigeria’s inflation es impair Earnings a forward P/E multiple of report for July’20. Inflation Remarkably, in spite of 5.5x (current P/E:3.9x), we rose to a 28-month high of pandemic and exchange maintain a BUY rating. 12.82%, 26bps above June’s rate driven inflationary figure (12.56%). This was pressures, cost of sales only Whilst reasonable care a fallout of the devalua- grew by 9% y/y to N129.0 has been taken in preparing tion of the Naira and up- billion, taking gross margin this document to ensure tick in the prices of PMS. 5ppts higher y/y to 17%. the accuracy of facts stated This translated into higher Furthermore, we believe herein and that the ratings, inflation outcome for all that Flourmills has started forecasts, estimates and components of the Con- to reap some benefits from opinions also contained sumer Price Index on a its B2C marketing strategy, herein are objective, rea- year-on-year basis. Food evidenced in its reduced sonable and fair, no re- inflation rose to a 28-month distribution expenses. sponsibility or liability is high of 15.48% while core Meanwhile, the company accepted either by Vetiva inflation eased by 2bps to recognized a N9.4 billion Fx Capital Management Lim- 10.10%. All segments of loss after it revalued c.₦47.5 ited or any of its employees the core index experienced billion in foreign trade pay- for any error of fact or opin- higher pricing pressures ables owing to the recent ion expressed herein. led by health (11.61%), currency adjustment. De- transport (10.80%) and spite this revaluation, oper- clothing (10.61%) segments ating profit expanded 11% BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 FINANCE & INVESTMENT 21 ANALYST INSIGHT

typically viewed as a temporary productivity. measure to ensure that firms and Finding your Place as an African their employees could continue Some of these actions are to operate effectively in the short- to: term, laced with a sense of ‘uncer- • Ensure that teams are thriving Business in the New Normal tainty’ until the eagerly awaited rather than surviving in the new end of lockdown was announced environment and if not, create the and businesses could resume. But culture, instill the behaviors and as the weeks gradually passed and implement the tooling they need government measures adjusted to deploying structured approach. It the reality of the pandemic, there is also essential to protect teams’ As COVID-19 pandemic contin- has been a matching comprehen- mental health and wellbeing pay- ues to cause significant confronta- sion that this new way of working ing attention to key elements in- tional impact on the global econo- is likely to persist for the longer cluding ergonomics my with governments around the term. Maintain productivity across world implementing various fiscal The first rapid response phase key programmes by rapidly de- measures to mitigate its effects and is a business continuity driven ploying agile systems and ensuring provide relief for businesses and adoption of remote working albeit high-risk or critical programmes households, the measures taken by sudden and unplanned - this stage are kept on track. African governments have signifi- has been famously completed. To • In parallel, plan proactively cantly differed on the areas of focus, follow intrinsically, would be for for the re-integration of those comprehensiveness and multi- businesses to consider the second elements of the workforce whose stakeholder- ship relativeness. phase of adapting and enhancing in return is business critical. Resist Despite the doom predictions order to optimize ways of working the urge to wait for government that Africa’s projected GDP growth with a clear focus on enhancing mandates to commence scenario of 3.2% for 2020 is now expected the effectiveness of remote work, planning and also take time to to fall to -0.8% due to the en- maintaining employee wellbeing, evaluate options. forced partial or total lockdown upskilling teams on remote col- • Finally, grasp the opportunity of economies brought on by the laboration to ensure key milestones to reimagine the art of the possible. pandemic, the commencement of are still hit, and ensuring that Organisations can emerge from the a new- normal within the corporate tooling is in place to allow teams crisis with an enhanced employee space as the start of a whole new to do their jobs. These should not value proposition in place along- experience with a matching need be ‘sticking plasters’ that will leave side a fresh perspective on cost for businesses to adjust and re- institutions with a COVID legacy reduction opportunities. strategize is not unnoticed. Prior to to solve but rather robust strategic As Corporates in the African now, the response to the pandemic enhancements. region emerge from the initial took a sudden toll on business Finally, the third phase is the and any subsequent lockdowns, leaders, but today, every player in transition into the ‘new normal’ businesses will need to strike the the corporate world, from CEO to that will emerge post-COVID - 19, optimal balance between adher- junior employee must face certain and the potential pivots required ing to government guidelines, realities including the fact that our to under- anticipate the burdens Despite the existence of robust as part of that journey. Central to respecting the desires of their industries, careers, work culture of its uncertainties as real fears frameworks, strong employee de- that is a re-imagination of what the workforce and delivering on their and roles have changed. This can- of a rise in social inequality loom mand and proven benefits, at the workforce of the future looks like own goals. Those organisations that not be denied. across, ultimately putting pressure beginning of this year, the reality and an openness to embracing a grasp the opportunity to re-assess, As a region, Africa for the first on governments to become more of new ways of working was yet to new model of business as usual. re- engineer and re-imagine their time perhaps has the opportunity versatile in managing the welfare be widely adopted and optimized. Business leaders and drivers workplace proactively will be best to re-write its script, leveraging this of their citizens. However, over the past two months, may seem to have their work cut placed to offer a differentiated em- new normal bursting with oppor- COVID-19 had compelled firms companies have shifted abruptly to out for them in providing direction ployee value proposition, and will tunities and un-explored business to rapidly embrace remote working remote working arrangements, in and balance in this new world but also reap the benefits of increased landscapes with experts project- – presenting a unique opportunity some cases literally overnight. in reality, everyone must play their efficiencies and ultimately a signifi- ing new levels of productivity for to embed new ways of working in A trajectory of this new behav- part. Corporate organisations need cantly lower cost base. businesses. This is however not preparation for the ‘new normal’. ioral pattern suggests that this was to adopt specific actions to sustain Dollar scarcity worsens, Analyst Fed minutes put the NSE fails to join party Insight brakes on stock rally FOMC’s July meeting which low for a long period, market bulls stealing the show by Nigeria is still expected to reminded investors that the participants needed more propelling the S&P 500 to contract by 5.4% according economy is still not in good assurance and they did not all-time highs last Wednes- to the International Mon- shape. The surge in Covid-19 get this. Analyst day. The tech-heavy Nasdaq etary Fund (IMF) thanks to infections over the summer The failure of Wall Street joined the party overnight, COVID-19, while inflation has muted the recovery and to build on Tuesday’s re- Insight making a record despite continues to rise on the back anyone still believing in a V- cord closing high may be growing signs of economic of continued border closures shaped recovery needs to do worrying. The rally over the weakness. Shares in Asia re- and the lingering effects of some reassessment. However, past five months has been bounded during early trade coronavirus-induced supply HUSSEIN this was not the only reason mainly driven by Tech firms while European equities disruptions. It is the same why investors turned defen- which have become a de- pushed higher thanks to the story outside of Nigeria with SAYED, sive. The fact that the Fed fensive sector in the Covid tech-inspired highs on Wall other emerging markets and Chief market appeared reluctant to step era, but there were hopes Street. developed countries nursing strategist, FXTM up further stimulus efforts that the more economic However, some emerging deep wounds from lock- imminently disappointed sensitive sectors, commonly markets were not invited to down restrictions. At best, FTER A BRIEF the bulls who were expecting known as ’cyclical stocks’, LUKMAN the party with the Nigerian the outlook for the rest of CELEBRATION further clues on the trajectory would follow suit. Now with stocks struggling for direc- 2020 remains clouded by OF a new in- of monetary policy. concerns over valuation in OTUNUGA tion this week. The Nigeria uncertainty. traday record While the Fed did not rule tech stocks growing bigger, Senior Research Stock Exchange All Share Investors may be offered high on the S&P out the idea of yield curve improvements in economic Analyst at FXTM Index (ASI) is still down al- some clarity over how Nige- 500A and a two trillion dollar control or targeting specific data likely to cool down and most 6% year-to-date despite ria fared in Q2 when Gross market cap for Apple last maturities on the yield curve, the scale of fiscal stimulus the S&P 500 and Nasdaq Domestic Figures are re- Wednesday, the music sud- policymakers do not seem still unknown, expect to see H O both hitting record highs. leased on Wednesday 26th denly stopped and with it, the committed to following this further profit-taking and W O U L D Although global equity bulls of August. With economic ‘rally of everything’. All major path yet. The other disap- a return to a more volatile H A V E continue to derive strength growth in the United States US indices began to stumble, pointment came from a lack market. THOUGHT from unprecedented central plunging 32.9% in Q2, the the dollar woke up from a of commitment towards more The problem that many that nearly bank support and handsome UK contracting 20.4% and 27-month low, oil declined forward guidance on the path investors will face today in a sixW months after the corona- fiscal packages, this liquidity even South Africa growth and gold lost 3.5% in value. of the federal funds rate. That market downturn is the high virus menace paralysed the fuelled rally has been unable projected to tank as much Asian and European stocks was a significant change from correlation between asset global economy and battered to find its way into Nigerian as 40% last quarter, it will are following Wall Street lower the previous minutes which classes. There is no place to financial markets, world markets. be interesting to see how today and US futures are also indicated the need to pro- hide and diversification is stocks would push higher Sentiment towards the Nigeria performed. An eco- indicating further declines to vide longer-term forward no longer effective in such with some major indexes largest economy in Africa nomic contraction is widely the start of the trading session guidance and to only raise connected markets. The only hitting record highs! remains fragile thanks to dol- expected, the question is across the pond. rates when specific economic way to protect portfolios is It was another phenom- lar scarcity, shaky oil prices how deep? The change in mood has thresholds are met. Despite through increasing cash allo- enal trading week for glob- and external risks in the been clearly down to the re- the fact that the Fed has been cations and buying expensive al markets with US equity form of US-China tensions. lease of the minutes from the clear that rates will remain put options. BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 22 COMPANY & BUSINESS

ers with fast, secure and con- Airtel, venient options to receive and send money as well as Infinity Trust Mortgage Bank accesses MoneyGram access their funds from a vast distribution of exclusive partner to kiosks, agents and branches N2.7bn on-lending facility from DBN at their convenience. ease money “This is a significant step forward in our ambition transfer to transform lives through greater financial inclusion for 19m and empowerment across the continent. Maximizing customers access to global remittances Charles Abuede is a key part of this - even more so given the disrup- IRTEL AFRICA tion and economic hardship PLC, WHICH faced by many as a result of PROVIDES the COVID-19 pandemic,” telecoms ser- the CEO further noted. vices across 14 Also speaking on the new countriesA in Africa said it strategic partnership with has entered into a strate- Airtel Africa, John Gely, head gic business partnership of MoneyGram Africa, said: with MoneyGram, in a joint “This partnership with Air- venture that will allow nine- tel will enable millions of teen million Airtel Money consumers instant access subscribers to route any to our global platform to MoneyGram transfers from receive money from over L-R: Olugbewesa Kofoworola, principal, Opebi Senior Grammar School; Wahab Alawiye-King, executive chairman, Lagos an international destination 200 countries & territories State Universal Basic Education Board (LASUBEB); Steve Babaeko, chief executive officer, X3M Ideas; and Grace Akin- directly into their mobile without having to even step foyewa, director, Ministry of Education, representing Folashade Adefisayo, Lagos State commissioner for education, at the wallets. outside”. commissioning of a state-of-the-art hand washing station /facility donated to the school by X3M Ideas as the agency’s 2020 In a disclosure signed According to the state- CSR intervention project to commemorate its 8th year anniversary in Lagos, yesterday. by the group company sec- ment sent to the Nigeria retary, Simon O’Hara and Stock Exchange, the compa- Charles Abuede A.M. at the weekend, re- This will further broaden the the Nigerian development accessed by Business A.M nies revealed that this latest vealed that the bank was mortgage penetration depth bank is one of the key drivers on the website of the Nige- partnership is in line with HE DEVELOP- recently on-boarded as a in the Nigerian market. the bank can use to expand rian Stock Exchange, the Airtel Africa’s strategy of ex- MENT BANK OF participating financial insti- “As we speak we have its product offerings to the company disclosed that panding the range and depth NIGERIA (DBN) tution by the Development simplified our processes MSMEs as they constitute through the partnership with of its mobile money offerings has disbursed Bank of Nigeria (DBN) to in such a way that a mort- more than 90 per cent of busi- MoneyGram, a global leader to drive customer growth the sum of N2.7 access up to N2.7 billion for gage loan can be disbursed nesses across the country. in cross-border payments and market penetration. billion on-lending facility on-lending to its customers, within three days to an in- The bank further stated and money transfers, Airtel Particularly, the partner- T to Infinity Trust Bortgage and that it demonstrates In- dividual, giving that the ap- that the facility will help Money customers overseas ship with MoneyGram builds Bank. finity Trust Mortgage Bank plicant meets all the manda- reach more customers, es- will be enabled to instantly on the momentum of exist- The facility, according strong financial capacity and tory requirements. We have pecially the self-employed push funds directly to an ing partnerships on ground to the mortgage bank, is rating. streamlined our processes as well as those who want to Airtel Money mobile wallet with Mastercard and West- in line with the bank’s vi- Olabanjo Obaleye, the and incorporated the use of buy private or commercial conveniently. ern Union. Airtel disclosed sion of deepening mortgage bank’s chief executive of- technology, which has made properties. Airtel Africa CEO, Raghu- that this combined with the penetration and inclusion in ficer, while commenting on the disbursement of loan to The mortgage lender nath Mandava, commenting newly announced extension Nigeria. the latest development said: individuals so fast, making said it has consistently dem- on the joint partnership, of the joint venture with Infinity Trust, in a state- “Shelter is one of the basic us the leading primary mort- onstrated a strong brand said: “We are delighted to WorldRemit will further step ment signed by Akinwale human needs, this is why we gage bank in Nigeria which through its maintenance work with MoneyGram to up the growth of our mobile Ishola, the bank’s head of are passionate about provid- is reflected in our financial of steady profits over the provide millions of custom- money services. corporate communication ing needed mortgage loan to results.” years and operating flex- and brand support, filed to deserving Nigerians particu- The disclosure on the lo- ibility through strong regu- the Nigeria Stock Exchange larly those in the MSMEs sec- cal bourse further revealed latory business and service NIMASA promotes 9 tor to purchase properties. that the new partnership with ratings. directors, 586 others and accessed by Business HE GOVERNING deputy directors, and 71 grade Charles Abuede BOARD OF THE level 14 officers were promot- Ellah Lakes pushes expansion plan, NIGERIAN Mari- ed to assistant directors. ARELY 15 time Administra- Those promoted to direc- MONTHS AF- IMC Plantations acquisition in sight tion and Safety tors are the head, ISPS unit, TER the full closure notice to the Nige- an agribusiness company ecution of a definitive agree- AgencyT (NIMASA) has ap- Jidda Aishatu; head, marine acquisition of rian Stock Exchange titled, based in southern Nigeria, ment. Ellah Lakes Plc will proved the promotion of 595 accident investigation unit, Telluria Farms “Ellah Lakes Plc & Planta- acquired Telluria farms in update the market appropri- staff, including nine direc- Egbuche Rita; head, Eastern inB 2019, Ellah Lakes Plc, tions acquisitions-update”, a deal made for the further- ately and in accordance with tors. zone, Audu Sani; and head, Nigeria’s leading oil palm and signed by Oake Legal, ance of the business diver- its disclosure obligations,” the The promotions were ap- internal audit, Olamide Odu- producer, has announced which serves as the compa- sifications plans and also to notice published on the NSE proved at a meeting of the sanya. Others are head, HSE the potential acquisition of ny secretary, said both par- strengthen the company’s website further reads. board in Lagos chaired by unit, Anselm Nwanze; head, IMC Plantations Limited ties are already into exclu- balance sheet, enhance Meanwhile, the compa- Hon. Asita O. Asita. legal services unit, Egejuru in a transaction that will sive discussions regarding operations as well as the ny has advised the invest- A statement issued by Victor; head, SERVICOM, Bo- involve a 100 per cent pur- a potential transaction be- provision of access to new ing public and sharehold- Pjilip Kyanet, the Agency’s laji Kehinde; head, reform chase of the shares of the oil tween the two oil-produc- markets. ers on the need to exercise spokesman, said nine deputy coordination unit, Kabiru palm processing company ing firms, which is subject “Though a binding term patience when dealing in directors were elevated to sub- Murnai; and head, marine with substantial assets in to regulatory approvals and sheet has been agreed, the Ellah Lakes Plc securities stantive directors on Grade environment nanagement Delta state, Nigeria for un- execution of the definitive completion of the proposed until the company makes a Level 17, while 45 assistant department, Felicia Mogo. disclosed transaction fee. agreement. transaction is subject to full announcement on the directors were promoted to The company, in a dis- In 2019, Ellah Lakes, regulatory approvals and ex- proposed acquisition.

from Nigeria informally. CEO, Mrs Olatokunbo Fag- Nigeria can generate N41bn annually from export – NEPC “The country is blessed bemi, advised that NEPC HE NIGERI- ecutive director of NEPC, the United Kingdom, Unit- tural edibles. and yet we are still fixated should encourage Nige- AN EXPORT disclosed this during a ed Arab Emirates (UAE), According to Awolowo, on oil,” he said, adding, rians to standardise and PROMOTION recent stakeholders meet- India, South Africa and with the implementation “We must put more money export agricultural prod- COUNCIL ing hosted at the Murtala Spain. of African Continental into non-oil exports. We ucts, adding that, there is (NEPC) has es- Muhammed International The stakeholders, at Free Trade Agreement (Af- spend millions of dollars so much to benefit from it. timatedT that the informal Airport (MMIA), Lagos, by the meeting, were seek- CFTA) in January, 2021, drilling for oil and most According to her, for ag- export sector in Nigeria the Nigerian Aviation Han- ing warehousing facilities, the agreement will be a times, we come up with ricultural products to be can generate N41 billion dling Company (NAHCO) customs clearance and good advantage to the 22 nothing, but we do not in- accepted abroad, it must yearly.manufacturing in collaboration with some distribution of Nigerian products approved by the vest in the non-oil sector.” not only be well processed Segun Awolowo, ex- technical partners from products mainly agricul- government to be exported During the meeting, the but it must also be well group managing director/ packaged and labeled. BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 COMPANY & BUSINESS 23

business a.m. BUA continues Flour Mills posts 17% PBT growth KWA IBOM Nigeria AND ABIA STATES have COVID-19 with N154bn revenue surge in Q2’20 become the re- cent beneficia- intervention riesA of the ongoing efforts by with BUA Group to support the Recorded N953.4m increase in PBT to N6.45bn fight against the spread of donations to the coronavirus pandemic Delivered largely on back of favourable pricing (also known as COVID-19) Akwa Ibom, in the country. Abia across pasta, animal feeds and sugar businesses At separate presentation ceremonies in the respec- and Abdul Samad Rabiu for tive capitals of both states, the gesture, which he said Pandemic impact on earnings less severe the group presented eight will strengthen the state’s Charles Abuede ambulances, five to Akwa rapid response to the pan- Ibom State and three to Abia demic. LOUR MILLS OF State, through their respec- Governor Emmanuel NIGERIA (FMN) tive governors. said the gesture was a clear said it recorded a Akwa Ibom State got in demonstration of the readi- 17 percent year- addition 100,000 reusable ness and interest of Rabiu on-year growth in cotton made face masks. to join his administration profitF before tax as contained BUA representatives in the development of the in its unaudited financial who made the presenta- state. He restated his admin- results of its group and com- tions commended Gover- istration’s total commitment pany operations for the three nor Udom Emmanuel in to fighting coronavirus in months ended June 2020. Uyo and Governor Okezie the state even as school The growth comes after Ikpeazu in Umuahia for resumes for exit exams. the company achieved a their efforts in tackling the He promised to deploy N953.4 million increase in its pandemic and noted that the ambulances to the dif- PBT to N6.45 billion as at the the donations are in line ferent local government end of June 2020. L-R: Alaribe Linus, zonal coordinator, National Lottery Regulatory Commission, Imo/Abia State; with BUA’s promise to sup- areas of the state in line with In a financial statement Bertran Nwosu of Benchukus Ventures, a Dangote Cement distributor; John Nwaocha of J.C. port Nigerians in fighting his administration’s policy Nwaocha Services, a Dangote Cement distributor; Abua Peter, one of the winners; Funmi Sanni, signed by Joseph Odi- the pandemic. of ensuring that every part marketing director, Dangote Cement Plc; Bankole George, South-East regional director, Dangote Aliyu Idi Hong, BUA’s of the state is well equipped on Umolu, the company Cement Plc; Adeyemi Fajobi national sales director, Dangote Cement Plc, during the winner’s secretary and filed to the prize presentation of N1 million in Owerri, Imo State director of government rela- for eventual medical emer- NSE, Flour Mills of Nigeria tions, and Ibrahim Lile, gen- gency. revealed that it delivered eral manager, BUA Ports and “I have to personally largely on the back of favour- Recent earnings publications N134.75 billion that it re- geared at boosting our top Terminals, who represented be here to receive these able pricing across its pasta, suggest that the impact of the corded in the corresponding line while keeping the costs Abdul Samad Rabiu, the because there are a lot of animal feeds and sugar busi- pandemic on FMN’s earn- period of 2019. under control, we should be group’s executive chairman corporate organisations in nesses. Indeed, sales and ings has been less severe The company, in a note able to sustain the good per- and chief executive officer Nigeria and Africa who have gross margin was up 15 per relative to its peers. With on the financial results, said: formance for the remaining in the states respectively, not shown this kind of love cent year-on-year and 430 this in mind, along with the “Similar to the performance period”. commended the governors to us. To us as a people, this basis points year-on-year. strong performance, the over the last few quarters, Meanwhile, the shares of for their passion and cre- is a clear demonstration A further examination company says it anticipates a our business has been able the company rallied follow- ativity in the fight against of love and we don’t take of the company’s financials positive market reaction. to sustain the strong perfor- ing the positive fiscal year COVID-19. things like this for granted. shows that the PBT perfor- Similarly, the Nigerian mance in spite of the increas- 2020 results published earli- Governor Udom Em- And I want to thank BUA mance was driven by 16 per consumer goods manufac- ingly difficult terrain and er. As such the shares are flat manuel in Uyo said the for their kind words and ap- cent and 9 per cent positive turing firm recorded a 14.72 uncertainties. Management year-to-date but have out- donation was critical to preciation of what we have surprises in sales and oper- per cent surge in its revenues remains optimistic that with performed the broad market the COVID-19 campaign in done so far,” the governor ating expenses respectively. to N154.58 billion during the continued efforts in sales index by 6 per cent. the state and thanked BUA said. period under review from and marketing activities

Shehu Idris, village head of Covid-19: Julius Berger donates Zango Aya, and Danjuma Ecobank Nigeria CEO advises Bako, head of the Primary to Zaria, Kano communities, NIS too Health Care Centre, were graduates to go into agric, also on hand to receive the ULIUS BERGER NI- Zango Aya Primary Health Julius Berger CSR team. At day-to-day use products GERIA, THE engi- Care Centre, Namadi Sam- the Namadi Sambo Health IGERIAN it.”m he said. neering construction bo Primary Health Care Care Centre, the head of the TERTIARY IN- He stressed the impor- giant, has extended Centre, Sanusi Dantata centre, Hudu Wada received STITUTIONS’ tance for young Nigerian its donation of nec- General Hospital, Bebeji the Julius Berger team. graduates as- graduates to be digitally essaryJ hospital supplies Kano State; and the Kadawa Since the outbreak of the piring to go savvy, imbibe uncommon and palliatives to commu- Basic Health Centre in Ga- deadly corona virus in the intoN business have been ad- integrity, deep insights, ac- nities and hospitals in the run Mallam Local Govern- country, Julius Berger has vised to go into agriculture, countability and excellence country. ment Area of Kano State. consistently lived up to the food, telecommunications to be able to compete in the Recently, Julius Berge The Julius Berger hos- pledge by Lars Richter, its and finance related busi- new world order. According took its hospital supplies pital palliatives donation managing director, to con- nesses that have day-to-day to him, this fast-paced and donations to the Umaru team also made a dona- tinue to assist the govern- use. covid-19 impacted world, Musa Yar’dua Memorial tion of personal protective ment and people of Nigeria Patrick Akinwuntan, the only those who are respon- Hospital at Wuse in Niger equipment to the Nigerian to the best of its ability in the managing director, Ecobank sive to change and able to State, and also to the Pri- Immigration Service (NIS), fight to contain the spread Nigeria, gave the advice in learn, unlearn and relearn mary Health Care Centre a frontline agency of the and impact of covid-19. an address to graduands of that will survive. at Jere, Kargako Local Gov- government, in the deter- meaning citizens, whether In the fight to roll back Babcock University, Illishan “Our world faces many ernment Area in Kaduna mined fight to contain the individual or corporate, can covid-19, Julius Berger’s Remo, on Thursday. opportunities and challeng- State. But during the week covid-19 pandemic. offer them in their heroic corporate social respon- In addition, the Ecobank es ranging from spiritual, it extended this corporate “The executive man- and patriotic work to con- sibility contributions has Nigeria boss said they could economic, political, social social responsibility initia- agement of Julius Berger tain the covid-19 threat,” ranged from food supplies, also consider usinesses that to technological. Concepts, tive to more communities believes that, like the hard- said Prince Moses Duku, personal protective equip- will enable them to scale or identities, institutions and and Primary Health Care working frontline medical group head, media relations ment, necessary clinical grow without much addi- their definitions are being Centres along the Abuja- personal at the nation’s of the company. beds and mattresses as well tional capital such as Uber, challenged daily. You must Kano Road corridor. hospitals, the officers and On hand to receive the as an ambulance vehicle, Netflix, Tiktok. therefore bring into our un- The Julius Berger hos- men of the Nigerian Im- Julius Berger team at Jaji amongst others to Local “The basic values of folding world, uncommon pital palliatives donation migration Service who man were Iliyasu Magaji, head Councils, communities, punctuality, respect, humil- integrity, deep insights, ac- team from the Abuja-Kano the entry and exit points of the primary health care hospitals and government- ity, diligence, integrity have countability, excellence, Road project, donated more into and out of the country, facility; and at Labar by nominated covid-19 iso- become rare in the business servant leadership, creativ- hospital beds, this time to are also frontline warriors Zubairu Hamza, head of the lation centres across the environment. Do not take ity and a never-give-up spirit Jaji Primary Health Care who need every assistance clinic, as well as by Rufai country. these for granted. Keep them that truly creates a new, bet- Centre, Labar Health Clinic, and protection all well- Dikko, village head of Labar. and you will be better for ter world. BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 24 ENERGY, POWER & RENEWABLE

Business a.m. HE NIGERIAN NA- NNPC projects N19trn revenue in 3yrs TIONAL Petroleum missioning of a forensic audit by the Corporation (NNPC) national assembly at its own cost,” has projected a revenue he said. profile of N19.545 trillion He told the lawmakers that the betweenT 2021 and 2023. yearly budget of the corporation The Corporation made the pro- was vetted and approved by them jection at an interactive session through consideration and passage organised by the senate joint com- of MTEF and FSP that entailed rev- mittee on finance and national enue projections of the corporation. planning on 2021 – 2023 medium “Proposals such as our revenue term expenditure framework and projection, cost of operations are fiscal strategy paper (FSP). well stated in all MTEF/FSP docu- It also said the report on missing ments made available to the na- 48 million barrels of crude oil was tional assembly for consideration unfounded and a total falsehood. and approval, the basis upon which “Our revenue projections for the the nation’s budget is passed and three-year period of 2021 to 2023 signed into law, meaning that it is are: in 2021, we projected to gener- you (national assembly) that ap- ate N5.6 trillion; in 2022, we project- proves our yearly budget,” he ex- ed to generate a revenue of N6.575 plained. trillion and in 2023, we expect to He said the current GMD of generate a total of N7.37 trillion,” the NNPC is a change agent and the Group Managing Director (GMD) corporation under him has nothing of NNPC, Mele Kyari, represented L-R: Mansur Sambo, managing director, Nigerian Petroleum Development Company (NPDC), stresses a point to to hide. by the Chief Finance Officer, Umar Mele Kyari, group managing director, Nigerian National Petroleum Corporation (NNPC), during Kyari’s official He explained further that the 21 Ajiya, said. tour of NPDC’s facilities at Oredo, in Benin City, Edo State, recently dollar per barrel production cost the It also urged the National As- corporation was incurring on each sembly to carry out a forensic au- barrel of crude oil, would soon be dit on the claim, if it so desired as it planning on 2021 – 2023 medium ments on the issues. out clearance from the appropriate term expenditure framework and Ajiya, in his response to the alle- unit of the Nigerian Navy and there reduced to 13 dollars per barrel to approved the corporation’s yearly reduce production cost. budget. fiscal strategy paper (FSP). gations, said the fact was that there is no way any ship with such alleged Solomon Adeola, the chairman were no records of ships that sailed stolen crude can escape from the On the 40 dollars per barrel pro- The issues of alleged missing jected as oil price benchmark for barrels of crude oil and unapproved of the joint committee, had raised out of the Nigerian waters with such Nigeria shore. the issues. contraband and clearance from the “As far as the NNPC is concerned, the N12.6trillion 2021 budget, the yearly budget of the corporation NNPC boss said the projection was was raised at an interactive session Adeola had asked for proven evi- Nigerian Navy and Department of no barrel of crude oil is missing as dence and not verbal denial as done Petroleum Resources (DPR). falsely alleged and very ready to be arrived at, based on available vari- organised by the senate joint com- ables. mittee on finance and national by NNPC through media advertise- “No ship leaves the country with- investigated over it inform of com-

offshore and N1.708bn on- Siemens shore as part of Nigeria’s assures of counterpart funding for the Port Harcourt Refinery begins contractors power deal with Siemens end to power AG, signed by the Nigerian tendering for rehabilitation, upgrade grid collapse and German governments in 2019. lating losses. Activities at the ties to thrive in the interest of business a.m. The Head of Business De- refiner at Alesa-Eleme, Port the organisations and Rivers job expected in Q1 2023 Harcourt, which is a shout- people. velopment and Government Ben Eguzozie, aging director of the refin- ing distance from privately- The governor told the Dik- IEMENS LIMITED Affairs, Mr Oludayo Orolu, in Port Harcourt ing company, said in Port NIGERIA HAS as- in an exclusive interview Harcourt that the manage- owned Indorama Eleme ko-led management team of sured Nigerians with our correspondent, ment has begun strategic Petrochemicals and Fertil- PHRC who visited him, that HE PORT HAR- izer complex, depict gross there were many areas of of an end to the noted that the Transmission COURT REFIN- actions to revitalise the com- frequent collapse Company of Nigeria had pany, which has a com- inefficiency in a government mutual interests that could be ING COMPANY establishment. For instance, explored in a state that is the ofS the national grid with been able to build up capac- (PHRC), by far bined refining capacity of while IEPL is in its fourth headquarters of the nation’s the implementation of the ity at the transmission part Nigeria’s biggest 210,000 barrels per stream power improvement agree- of the value chain to over day (bpsd). turnaround maintenance hydrocarbon industry. crudeT oil refiner accounting (TAM) since buying over the Wike urged the refinery ment with Nigeria. . 8,000MW. According to the MD, for 47 percent of the coun- hitherto government-run management to ensure to The FG/Siemens AG The TCN, which manages try’s refining capacity, has the processes of tendering signed a letter of agreement the national grid, is still fully and selection of contractors Eleme Petrochemicals Lim- include in its budgeting to announced tendering and ited, the refinery (PHRC) is rehabilitate the refinery, on the Nigerian Electrifica- owned and operated by the selection of contractors to that will carry out the reha- tion Roadmap, now Presi- government. bilitation of the refinery was yet to complete a single TAM the access road to the re- begin its rehabilitation and in 20 years. finery which has been in dential Power Initiative, The system operator, an upgrade, even as the owner, already in progress. He as- in July 2019, with the aim arm of the TCN, put the na- sured that the rehabilitation Meanwhile, Governor a worse state for several the federal government, is Nyesom Wike of Rivers State years. He announced that of ramping up electricity tion’s installed generation already consumed by the and upgrade at the refinery generation in the country capacity at 12,910.40MW; would be concluded in the has urged the company along his government had paid 40 easy-way street of importing with others operating in the percent mobilization fee to to 25,000 megawatts in six available capacity at wholly petroleum products first quarter of 2023. years. 7,652.60MW; transmis- All this is coming after state, to build strategic part- the contractor handling the from different parts of the nerships with government to construction of Woji-Aleto- The Federal Executive sion wheeling capacity at world, including from coun- the company has remained Council, on July 29, 2020, 8,100MW; and the peak comatose for more than two promote rapid development. Alesa-Refinery Road project, tries without crude oil. He said such partnerships which would greatly benefit approved the payment of generation ever attained at Ahmed Dikko, the man- years, without refining a bar- €15.21m (N6,940,081,465.20) 5,377MW. rel of crude oil, and accumu- would make business activi- the refiner. NPDC gives life to NNPC domestic gas pledge; to raise supply by 600mmscf/d business a.m. 600 million standard cubic ager, group public affairs OMLs 42 and 111, which will for the gas plant to be fed growing the nation’s crude feet per day (mmscf/d) in the division, and made available each deliver 120mmscf/d. from the well. oil reserves and increas- UST DAYS AFTER next three to five years. to Business A.M. Additionally, the NPDC The projection of an in- ing production, and that he STATE-OWNED OIL Mele Kyari, NNPC’s group Sambo is quoted by Obat- chief revealed that the E&P creased domestic gas supply stressed that more of such company, Nigerian managing director, conduct- eru as saying this was a me- company has revved up by the NPDC comes ahead of was needed to meet the tar- National Petroleum ing a facility tour of NPDC’s dium term projection for production in OML 111 by the planned commissioning get of three million barrels Corporation (NNPC), Oredo gas handling plant in the company, which is cur- 2,100 barrels per day (bpd) of the liquefied petroleum per day production and sus- madeJ a commitment that it Benin City, Edo State, was rently the highest supplier of of crude oil and 27mmscfd gas (LPG) unit of the Gas tain the nation’s economic would work with stakehold- told by Mansur Sambo, the natural gas to the domestic of gas, thereby increasing Handling Facility, which growth. ers to boost gas delivery to managing director of NPDC, market that is expected to be cumulative production from Sambo is also quoted as “This gas facility in par- the domestic market, its that the company would executed in the next three to the acreage to 10,699bpd. saying would be ready in ticular will deliver at least exploration and production add 600 mmscf/d to the one five years. Besides, Sambo stated October, 2020. 240 metric tons of LPG to subsidiary, Nigerian Petro- billion standard cubic feet According to Sambo the that NPDC has also success- The NNPC statement domestic market within a leum Development Com- per day (bscf/f) it currently projection will be achieved ful drilled Well 16 in OML also quoted Kyari, the group year and that is a very signifi- pany (NPDC), has unfolded produces, according to a from production by OML 111, which was essentially managing director, as de- cant fraction of current level its strategic plan to raise its statement issued by Kennie 34, where 360mmscf/d is for gas with associated crude scribing the development of supply into the market,” gas supply to the market by Obateru, group general man- expected to be delivered and oil, adding that the plan was as a significant step towards Kyari said. BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 MANUFACTURING & INDUSTRY 25 BUA inks deal for 3 new flour milling plants in Nigeria Will add 2400tpd to raise existing capacity to 4000tpd Will deepen BUA’s food Abdul Samad Rabiu, executive chairman of BUA Group processing footprint The additional capacity bringing BUA’s total installed for completion next year. The per day will raise BUA’s total flour capacity to 4,000tons per day BUA Group said that upon Milleral has been manu- milling capacity to 4000tpd upon completion in 2021. completion, the proposed facturing and installing ma- as it currently operates in- This will further deepen our plants will position BUA chinery and turnkey plants Milleral, Turkish firm, prom- stalled capacity of 1,600 involvement in the foods as one of the leading play- for milling grains like wheat, tonnes per day with five processing sector as well as ers in flour milling in West corn, rye, oat to get flour and ises efficient, advanced, lines of pasta of 720 tonnes help enhance food security Africa. semolina for 27 years. world class facility per day, a statement issued in Nigeria and the West Af- A statement describing The company offers prod- business a.m. a deal with Turkish firm, by the gorup explained. rican region,” Rabiu said. the arm of the group that’s ucts, plants and services that Milleral, the manufacturer At the signing ceremony, Mustafa Ozdemir, chair- likely to be responsible for can appeal the necessities in and installer of machinery Abdul Samad Rabiu, execu- man, Milleral, who said they the business, noted that all parts of the world; from UA GROUP, THE and turnkey plants for mill- tive chairman of BUA Group, were elated by the develop- “BUA Foods is the agribusi- Middle East to South East FOODS AND ing grains. spoke of the excitement in ment, added that “Milleral ness and foods processing Asia, from South America to manufacturing The agreement was the group for the partner- intends to bring its experi- division of BUA Group, with Africa, adding that it contin- conglomerate sealed in Lagos, Nigerian ship with Millarel to build ence installing machinery diverse investments in the ues to work with team spirit founded by bil- for Milleral to build three the plants: and turnkey plants across agricultural value chain in by developing innovative lionaireB businessman, Abdul new state-of-the-art flour “We are excited about this the world to bear in build- sugar, rice, edible oils, flour technologies needed by the Samad Rabiu, is looking to milling plants in Nigeria with partnership with Milleral to ing an efficient, advanced milling and pasta. BUA cur- global economy and manu- expand its foods processing a combined capacity of 2400 develop our new state-of- and world class facility for rently operates installed factures its products per- footprint across West Africa tonnes per day (tpd) made the-art flour milling plants B UA .” flour milling capacity of fectly according to customer with the announcement over up of 800tpd for each of the in Nigeria with a total milling The plants are all lined up 1,600 tonness per day and 5 demands. the weekend that it has inked three plants to be built. capacity of 2,400tons per day lines of pasta of 720 tonnes

mid-term losses as LNG Furthermore, Africa’s deep- Africa’s upstream spend down $14bn, FIDs projects are delayed. Nation- water and LNG suffered al oil companies (NOCs) led deepest cuts to 2020 capital by OPEC+ members have the investment. With this devel- from 22 to 3, LNG hardest hit, reports reveal deepest production cuts. opment, onshore lower-cost On the economic front, developments are expected upstream value in Africa is to receive smaller cuts. The Where does this leave valuations, how core is Africa to its portfolios? down by one third or $200 majors lose 32 percent of up- deepest cuts. The oil majors billion. African upstream stream value, mid-caps fair But the continent is resilient, upstream lead on cost cutting, with NPV10 falls by one-third. worse with 39 percent losses. capital spend down $6 bil- LNG and conventional shelf The impact of this aligns with capex to rise by 2022 beyond 2019 levels lion in 2020. Their spend- projects have been hardest hardest-hit resource themes, According to AOW, the most international invest- Ben Eguzozie ing reductions in Africa are hit, with the value reduced production shut-ins and comparison reveals strik- ment in Africa’s upstream expected to be greater than by less than 50 percent. Over- project downgrades. ing changes in investment, sector, and they are cutting “After the Crash – What’s global portfolio averages. As all, NOCs lose most value, Nevertheless, Africa Oil production and value, as heavily. Cuts are expected next?” This is the question a result, the expected foreign but mid-caps suffer big- Week says, with a growing, companies adjust to the new to be larger than elsewhere posed by Africa Oil Week direct investments (FIDs) gest percentage reduction. energy-hungry population, market conditions. These in their portfolios. The report (AOW) in its two key reports in 2020 have fallen from 10 Sub-Saharan Africa suffers Africa appears to be resilient, include: upstream spend said national oil companies recently released, which to one. the biggest reduction, while with upstream capital ex- in 2020 is down $14 billion; (NOCs), led by OPEC+ mem- looked at the impact on “FIDs decimated: down value from LNG projects penditure forecast to exceed foreign direct investments bers, have cut deepest in the Africa’s upstream and deep- from 22 to just three over more than halves. The oil 2019 levels by 2022. (FIDs) targeted in the next short-term. Africa-focused water LNG, which have been 2020-21, most project defer- majors have lost 32 percent Africa Oil Week is an 18 months are down from Eni and Total account for hard-hit by latest demand rals will be in excess of one of upstream value. event that brings together 22 to 3; upstream value in the bulk of production cuts supply crisis in the oil and year, highlighting the scale Africa Oil Week says with governments, national and Africa is down one-third by the majors in the next gas market as a result of the of the crisis,” the AOW report upstream spend in Africa international oil companies, ($200 billion); deepwater five years. But where does Covid-19 pandemic. said. down by $14 billion in 2020, independents, investors, the and LNG investment are hit this leave valuations, and The two complimentary On the production side, the share of hydrocarbons G&G community and service hardest; no resource theme how core is Africa to their reports, produced in associa- AOW said African produc- in global energy demand providers. is immune. portfolios now? tion with Wood Mackenzie, tion will decline for the first could fall from 90 percent But cuts are particularly AOW said oil and gas sup- compared AOW’s latest data time since 2016, down 1.3 today to 50 percent by 2050. severe in deepwater and ply versus demand crisis had with its Q1 2020 view. It million b/d in 2020 as de- LNG. a hit on investment to Africa, states that this year (2020), mand falls, and OPEC cuts Capital expenditure revi- which had been hit hard, CHANGE OF NAME CHANGE OF NAME global oil and gas markets take effect. It is “the first sions on deepwater West resulting in deep produc- suffered a double crisis of year-on-year fall since 2016.” I, formerly known and I, formerly known and Africa projects and defer- tion losses, with upstream supply and demand. And Also, delayed, deferred and addressed as Michael addressed as Usaini rals on large LNG projects capital spend down $14 bil- Africa has been hit hard, and cancelled investments will Kelechi Lilian now Auwalu Mohammed in Senegal, Mauritania and lion in 2020, reducing by 23 widespread cuts and project slow the rebound. wish to be known and now wish to be known Mozambique both contrib- percent over the next five deferrals have been imple- On the gas sector, weak- addressed as Ezihe and addressed as Au- ute. years. High cost deepwater mented. As a result, what ened gas demand will cause Kelechi Lilian. All walu Usaini Ibrahim. The oil majors (Shell, projects in West Africa and has changed in the African short-term losses in North former documents re- All former documents Chevron, ExxonMobil, To- LNG projects in East Africa upstream and offer future Africa, while East Africa faces main valid. General pub- remain valid. General projections. tal, Eni) are responsible for have equally suffered the lic please take note. public please take note. BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 26 THE MONDAY INTERVIEW Q&AINSIGHTS FROM NIGERIAN AND INTERNATIONAL BUSINESS & CORPORATE LEADERS ICT is new oil. Government should bring up policies to make things better – Ogungboye, CEO, eStream Networks Apart from stakeholders in your industry, the public would like to know more about Muyiwa Ogungboye and the operations of eStream Networks. This is because un- Policies should trigger surge of investors in ICT like other players, you hardly flood the media with mes- sages about you? Y NAME IS MUYIWA ABDUL-RAZAQ If not, can the banks start investing in us? OGUNGBOYE, managing director and founder of eStream Networks. eStream was founded 15 years ago by myself and a senior MUYIWA OGUNGBOYE is the founder and managing director of friend of mine. We started out as a satellite eStream Networks Limited, an indigenous telecoms company communicationM company providing the traditional V-SAT, specifically to the financial sector. But over time, we have operating in the Internet Service Provider (ISP) space. Starting evolved into providing communications services through fibre, radio and 4GLTE. This evolution happened about five with just one-technology to render access services, eStream, which years ago and that’s what has been going on now. So, we’ve grown. But like you have asked, you don’t hear much from now combines multiple technologies from satellite to fibre to LTE, us in the media simply because, when our service was just one mono product, we knew our market focus. We could has now putting in 15 years weathering the storm in the Nigerian just go there and talk to them. Now with many products, we market. Ogungboye, who also just turned 50 years, fielded questions did some media publication, but we didn’t do it, perhaps as extensively as required. That is maybe because of our huge with business a.m.’s OMOBAYO AZEEZ, at his Victoria Island, Lagos investment on infrastructure and we don’t have so much money to spend again on marketing. That could be one of office, from where he coordinates eStream’s operations across the the cases. But this year is a year that we intended to do a lot of marketing, until this COVID-19 started. The pandemic country. Excerpts: has really truncated our marketing activities. But in a nut- but we didn’t really put so much emphasis on it. However, the cloud is the question. So, we saw a lot of requests as shell, there is hardly any bank you will go to or any micro- we started getting more requests from people to have their people kept asking for various cloud services. We’ve been finance bank, insurance company, or schools that you will networks secured. We keep on seeing all that and we keep able to come up with some. We had a powerful agreement not hear our name. We’ve been around and we will keep on on attending to them. The money might not be bulky but with a company called PCCW. We are one of their Nigerian moving ahead. at least, it is keeping us afloat. So, if we have 1,000 custom- partners that are hosting all their cloud services. We are be- In terms of our coverage areas, the services we provide ers asking for security and we are installing one thing or the ginning to see a surge in demand coming up in that area as now cover almost the entire country. Satellite covers the en- other for them, and it’s a managed service; as a recurring fee well. So, I will say the pandemic has come with a lot of pain, tire country. That’s given. But when we moved into fibre and every month, if you multiply that at the end of the month but we also saw some level of benefits as well. radio, we had to have a whole lot of partnership. So we have over one year, you can imagine the kind of money we will all the Mobile Network Operators (MNOs) working with be talking about. With the lockdown and social distancing, it is believed us to spread the coverage throughout the country. We also Similarly, our cloud service also witnessed a surge in that human capital management is assuming a new sta- have Bitflux working with us for us to continue to provide patronage. In fact, cloud service has become a big boom tus with ICT coming in between. As an IT company, how 4G LTE specifically in Lagos State and as they move out of during this pandemic period. Almost everybody wants to far has this reflected on your operations? Lagos State, we go along with them as well. So, our services be connected to the Internet and the cloud. In connecting On the human capital side, we had been preaching or cover the entire country; and our services cut across all the to the cloud, the only way is that every organisation must playing around work from home for the past three or four various levels of organisation. have internet access. But where are you connecting to in years but we’ve not been able to get it correctly in the coun- We are more structured for big businesses, govern- ment and small enterprises. And that is why you may not have been hearing much of our noise in the media. When you make marketing noise, you are actually talking to the individual consumers and the general public. But when you don’t make noise but there is a particular sector that identifies with you and knows who you are and what you do, that means you are doing niche marketing. Instead of us to just be making the noise, we would rather talk directly to the head of ICT of a particular organisation. That’s how we’ve been moving on, but like I said, our services cover the entire country as well as all technologies. It then means that hardly can we say no to any communication brief or problem we see because, everywhere in Nigeria, we have a solution for every enterprise whether big or small, local or multinational.

Dealing with the impacts of the coronavirus pandem- ic on businesses has been a general concern. What has it been like for eStream? The pandemic has made us realise some of our hidden potentials which we never thought of all this while. Yes, the pandemic did come with its own problems because when the pandemic lockdown started, there was a dive in our revenue. Like I said, we provide services for enterprise and when the enterprises shut down, our business too goes down. We had a lot of revenue losses in March and up till April. But by May, things have started picking up a little bit here and there. At the height of the lockdown, we got a lot of suspensions because enterprises and so many organisa- tions were not operating. So, it affected us severely. We then noticed, however, that there are some hidden strengths that we had but we never realized. A typical example is our col- location service. We noticed that during this pandemic pe- riod, we got mammoth requests from organisations wanting to collocate their servers in our data centre. And during this period also, we have quite a number of customers coming to locate their servers and equipment in our premises both in Lagos and wherever we have a point of presence (PoP). So, we saw a surge in those areas which we never envisaged before the pandemic. Secondly, we also received a whole lot of requests com- ing in on security. Security was part of our focus for this year BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 THE MONDAY INTERVIEW 27 Q&AINSIGHTS FROM NIGERIAN AND INTERNATIONAL BUSINESS & CORPORATE LEADERS

If indigenous companies ICT is new oil. Government should bring up policies to are not protected, then,

every of our investments, “ revenues, innovations make things better – Ogungboye, CEO, eStream Networks and ideas will all go to “

try. We couldn’t come up with any modalities of how it foreign land and we would be done because of monitoring. So, we’ve been toy- would be left with noth- ing with it and we couldn’t get any answer to it until every- body was forced to do it by the pandemic. Right now, ma- ing jority of people can work from home and to my surprise, the staff are more diligent and we are even getting more results than before. We hardly have downtime again. So, I’ll say that the pandemic came with some blessings that nobody ever expected. It also gave staff more flexibility to work and People believe that the post-pandemic era is going to amidst that, the love for the organisation increased and this be a completely different terrain. What are the chang- has reflected in their dedication to their job; a lot of innova- es you can foresee particularly in the telecoms sector, tions from their side, and paying attention to details, which ahead of such a time? we didn’t see before. People could actually be this dili- Yes! Things are not going to be as usual again. There are gent? So, to me, it’s quite surprising to see all these positive going to be a whole lot of transactions happening in the sides of the staff during the period. Maybe that is because cloud, moving forward. That is a major change. Also, there they work from home and they are more relaxed. There is are going to be a whole lot of applications happening in the no traffic problem. But honestly, productivity has actually cloud. That is also a very big change. For us as an organisa- increased. We are also hoping that by the end of the year, tion, we are moving away from access. We are moving into though revenue may drop, I don’t think we are going to end solutions. We are moving into applications and that is go- up at a loss. We are surely going to close the year at a profit. ing to be the future. Access is going to be a norm. Access is How much? I don’t know, but it is not going to be as bad going to be like a phone. Everybody has a phone or laptop. as we thought when the pandemic started because we have Access is not going to be a profitable venture. Solutions, ap- been able to see some new things happening along the line plications that you can put on the cloud will now be the way that we didn’t really expect. So, the pandemic has its own forward. And that is going to differentiate us from others. blessings. The normal thing of rushing to work will stop. I see that go- ing down already because now almost everyone is getting The ISP market, where eStream operates, has re- used to working from home. I don’t think enterprises or mained challenging over the years. What are the rescue organisations are going back to the way they used to work, measures you would like to recommend to help opera- that is, resuming 8:00 a.m. I don’t see that happening again. tors in the space to weather the storm? Working from home is the new normal and everyone is get- Well, let me start from Lagos State. I believe we can all ting used to it. We are used to working on a skeletal basis see that the Lagos State government is already moving in the office. Now, I only come to the office twice a week ahead. Against all odds, the state government is laying fibre and yet, I get my job done. Also, I see a lot of transactions optic infrastructure all over the state. That is a very big step involving the ICT industry and every other sector. I see ICT and development to help the ISPs. Again the state has set now truly becoming a major player in moving the economy the pace for every other state to follow. We hope the fibre of the nation forward. This is because without ICT, I don’t being laid is well done and we also hope that it is going to see how any other sector or country can progress. There is be well managed and well operated. What that will do is that no way. all of us will tap into that infrastructure. That would reduce ICT now has the major part to play. So, for me, I think our operational cost tremendously because it means that a new oil has been found – ICT. It is now left for the gov- there is a common backbone for everybody to tap into. The ernment to bring up some policies that will make things main benefit I want to see from the project is price unifor- better. Yes, the ICT is a deregulated market. But even as it mity so that there won’t be any price advantage again. What is deregulated, we can still have some kind of regulations will now be left are services that you can provide on your that will make people to be able to invest in it. Take for in- connection. stance, in the oil and gas sector, there are so many investors. I expect an arrangement in which companies A, B and All the banks will always support oil and gas. How many in- C Internet Service Providers (ISPs) will all be going into vestors do we have in ICT? How many banks will support the same infrastructure at the same cost. So, there should ICT? The government should start to bring up some policies be price uniformity across board. That alone will eliminate that would trigger a surge of investors in ICT; that would al- a whole of problems in our sector. A lot of ‘backstabbing’ low all the banks to start supporting us. I am an advocate (if I may use that word) among ourselves will also be re- of a telecoms bank. If that is not going to happen, can the moved. Though, it is going to take some time because we existing commercial banks find a way to start investing in have to allow Lagos State government to first set up the in- us? But they can only invest in us when they are sure that frastructure, run it, test it and manage it well. There is still their money would always come back. The only way that quite some work to be done by the Lagos State government. will happen is that we need some papers from the govern- But personally, as an MD of an ISP company, I believe the ment that will let investors know that we are real and their project is a welcomed idea and I see a lot of problems being money would not disappear. So, we need some level of sup- solved. I just hope that other states too will emulate and fol- port from the government. We have been advocating for all low suit and emulate it. these things. The Nigerian Communications Commission There might be this challenge of some companies that (NCC) is trying, but I think because the sector is deregulat- have purchased the licence to operate in their own state. ed, we are seeing some things as free for all – anybody can Well, when you get the license to be the de-facto infrastruc- do it. But we cannot operate like that because we would not ture provider in say Kwara State for example, and you don’t be able to attract the kind of needed investment that way. have the financial muscle to lay the fibre infrastructure. The We still need some form of protection from the government. license is valid for 10 years. Five years down the line and Some form of protection especially for indigenous compa- you are still looking for whom to lend you the money. Five nies. If indigenous companies are not protected, then, every years are gone out of your 10 year license. How much time of our investment, revenue, innovations and ideas will all do you have to lay the infrastructure and how do you want go to foreign land and we would be left with nothing. And to reap the benefit of it. But if the state government says I must say that we have tremendous talent here in Africa, “you know what, it’s tax payers’ money. We would do it but particularly in Nigeria. But this pool of talent needs invest- every ISP would now have to start buying from us and we ment for us to be able to unleash the ideas in our brains. would charge you a uniformed price.” I see this as a win-win That is where we believe the government should come in to pen going forward. situation. Yes, they have purchased the license at a fee, but support us. But I strongly believe that the way we’ve been I believe there could be a balance they can strike between running things since the pandemic is just like laying a foun- Discussion around multiple taxation and regulation the people that have the license and the state government. dation that we would have to build on in the future. The fu- often comes in as a concern against scaling up the tele- I would suggest that other ISPs that have those kinds of li- ture is left for organisations that can innovate. coms sector. How could this be most effectively dealt cense should approach the governments and sit down to As things change, however, one risk is efraud. That is just with going forward? table their case and see how they can reach some sorts of another thing that will happen alongside our new ways of Well, again, Kudos to the Lagos State government. They agreement. Maybe they are going to get some tax relief so doing things. Security would be a major venture going for- have already taken a giant step that taxation or no taxation, that they can recoup the license fee that they paid for. But ward and eStream is already positioned in that part. We are the state is moving forward and that is why they are laying I want to believe that there would always be a way to work already positioned to ensure that we are able to give our fibre infrastructure everywhere in the state. It would come around it. customers the needed protection and security solutions from attacks. So, those are the things that we think will hap- Continues on page 28 BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 28 THE MONDAY INTERVIEW Q&AINSIGHTS FROM NIGERIAN AND INTERNATIONAL BUSINESS & CORPORATE LEADERS ICT is new oil...

Continued from page 27 to a time when we would begin to realise that multiple taxa- tion is not the way to go. Currently we pay about 30 taxes generally. Right now, operators cannot survive with that. It’s not been easy fulfilling such obligations. We have to find a way to come to a point whereby all we are going to have is one uniform tax that covers everything. I don’t know the name the government will call it. But that has to happen. The governments have to realise that this multiple taxa- tion era is over. Businesses cannot continue like that again and the government cannot continue to make money like that again. Governments have to realise that they have to come to a situation where they will be in agreement with us, because we own the future. If they don’t agree with us, how do they want us to get IGR for them? IGR is going to be in the cloud. So, how do you now start taxing the cloud? I see it as a matter of time, and the time has come. In an- other one-year time, I believe the multiple taxation issue would have subsided in states like Lagos. You don’t know how happy I am with what the Lagos State government is doing. This is what we are looking for. Lay the whole infra- structure. Charge us one single fee, and charge us one sin- gle tax. Everybody is equal. Government would make more money just as there would be loads of innovation and loads of enterprises that will also spring up. So, the government needs to realise that the best way for operators to continue to operate while the governments also earn their own IGR is to embrace partnership with enterprise. I believe that while multiple-taxation is still there, this pandemic will force the government to relax some taxes.

What are telecoms operators saying regarding the support fund the FG is giving to some sectors to cushion that, and the governments feel the need for them to partake to Almighty God for sustaining us this long. I will also say a the pandemic effect? actively in this venture, I see no reason why we should not very big thanks to all the staff of the company, existing ones The question is a good one and I am happy you asked surpass that 70 per cent target. This is because eStream, as and those that have come and gone. They’ve all played their me. You see, I won’t blame the Nigerian government. I will an entity, may not have the financial muscle to lay more part in growing this organization. But again, like I said, I will blame their advisers. They see the ICT just as ICT. If you say than one kilometer of fibre infrastructure. Maybe, I don’t consider myself a very lucky chap because if you look at the you are in ICT, as far as the government is concerned, you have money to do more than 20 base transceiver stations. Nigerian ICT sector generally, especially the ISP industry, are MTN. And the kind of advertisements MTN, Globacom But when the government now comes in and decides to lay I think I’m the youngest indigenous. One way or the other, are doing cost a whole lot of money. So, when we now go fibre everywhere, put base stations in place and another I’ve been able to weather the storm for 15 years. It has not and meet the government and tell them that we are not company will manage it, why then shouldn’t we achieve the been easy and there are still a whole lot of challenges ahead Globacom; what Globacom is doing is different from what 70 per cent broadband penetration target? Government is of me, but God has always been supportive and we are mov- we are doing, the government doesn’t understand this. the biggest spender everywhere in the world. Government ing mountains. I just want to use this medium to appreciate They see us all as the big operators. They see us as MTN. so, is the richest entity anywhere in the world. So, if the rich- the almighty God and to appreciate everyone that has been they believe we have so much money or we are making so est entity and biggest spender is now saying “I want to help part of the success story. much money. They don’t know that ICT has different seg- you”; then, why shouldn’t we achieve and even surpass the ments, areas. However, in oil and gas, for instance, they un- target? What should be expected as the new phase of devel- derstand that there is upstream and they know that there One more important thing is that the government should opment for eStream? is downstream. Similarly in the banking sector, they know also find the right people to talk to because anything that is Fantastic question! Just as I said earlier, we are gradu- that there is merchant bank, there is commercial bank, and booming will always attract all sorts of Tom, Dick and Har- ally moving slowly out of access. Access has brought us to there is microfinance bank. Somebody is educating them ry, entering it and saying all sorts of things. So, I would ex- this point. We’ve been doing access for fifteen years. But (the government). Somebody is educating the government pect the government to dialogue with people like us that are the pandemic has opened our eyes to many other things to know the different aspects of the financial sector as well reputable. At least, this is 15 years that we’ve been running that we’ve never thought of. We are gradually moving to as the oil and gas sector. Who is advising our government on eStream and we still exist. We are still moving on and invest- solutions and applications. We are not going to be writing telecoms sectors that the players are different. So, when we ing. But when the government decides to leave local experts software because we are not a software company. But we take our case to the government that we need investment, and is now talking to one Portfolio Manager because it is a want to push some applications that are user-friendly on we need support; we need palliative, and shortly after that, friend to the government, then there is a problem. The gov- the cloud. That is already on our shelf. They are applica- they open up their TV and see Globacom, MTN spending ernment should seek the advice of stakeholders that have tions that organisations would be able to use easily. We are huge money on promotion, the government people will say been existing, that have been investing and have been in this coming up with a whole lot of security solutions that will we don’t need any support. industry; those ones that have perspired and paid tax, the be affordable for homes, individuals and enterprises. We So, we need that constant communication and that con- indigenous players. We are ready to die here. We don’t have are coming up with a lot of entertainment, especially in the stant advice to the government that we are different from anywhere else to go. We love the country. Even without any gaming sector. So, we are looking towards services that are one another; there are different sectors of ICT. We are differ- support, we have been moving on. We are the people that solution-based and not typical access-based. That is the fu- ent players. Our revenues are not the same. Our customers the government should listen to and not one portfolio guy ture. That is our future and we believe it is going to be a big are not the same. The government must be advised on the coming from after ‘Mongolia’. They should listen to us. We one. Our traditional access business would still be running sections that need more investment, palliatives and sup- are ready to work with the government but the government but the solution services will gradually evolve out. port. So, there is a need for that advice to happen and that should also listen to us so that we can form a very strong is where ATCON comes in, in conjunction with the hon- bond. The government is listening to the financial sector. Do you have plans to bring in more investors into eS- ourable minister of communication and digital economy. I They are listening to the oil and gas. Why won’t they listen tream or probably go public? must say that the minister is doing a fantastic job. He has to us, the driver of all these sectors? If you remove ICT from just spent one year in office but he has done a whole lot. the financial sector, it will collapse. If you remove ICT from Well, going public is not yet what we intend to do, be- One of the areas he has really championed is to ensure that oil and gas, it will collapse. Even if you remove ICT from the cause doing that has a lot of criteria and conditions that telecoms infrastructures are treated as critical national in- government, it will also collapse. The IGR that Lagos State is must be met. I think the first thing we are trying to do right frastructure. We have to continue to be dialoguing with him getting today is a function of ICT. So, why won’t they respect now is to increase our investment and our capital base. so that he can take more of our cases to the government and us! Maybe that’s because we too also have our own internal We’ve been on that since last year. It is just that the pan- it can be properly understood up there that every telecoms problems regarding associations and other stuffs like that. demic slowed us down. I was in Abuja about two weeks ago operator is not MTN or Globacom. Maybe we have that problem, but we can always solve this to meet some people whom I’ve been discussing with. Our when we see a big brother that is ready to help. financial report has been distributed to some interested Nigeria has set out to achieve 70% broadband pen- parties, but I personally told them to let us have a clear view etration by 2025. As this revolves around accessibility, eStream Networks Limited is 15-year old now and of where this pandemic is going. At this moment as a busi- availability and affordability, how much does the situa- you, the founder, is also celebrating your 50th anniver- nessman, one needs to be careful about collecting money tion in the industry support such target and the possibil- sary. What do you have to say at this point of the journey? from investors especially in this pandemic era that we are ity of achieving or even surpassing it? I am very happy and I will count myself a lucky guy. 15 in. I think right now, the focus is more of safety – how to The penetration has already surpassed 40 per cent. The years in this game is not a joke and we are still in existence. remain alive. I would rather advise anybody now that “let initial target of 30 was achieved and surpassed at the stipu- Like I said earlier, we now provide services on all the tech- us be alive.” It is only when you are alive that you can think lated time. But we surpassed it with the private sector initia- nologies and we have strong agreements with all the big of innovation. But yes, we want to improve our capital base tive, private sector investment. Going back to Lagos State, MNOs. We also have strong agreements with some interna- so that we can be able to put in more infrastructure on what if we can have more support from the government just like tional players. So, we have grown and I will say all thanks go we intend to do. So, it’s on the table. BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 NIGERIA FRONTIER MARKETS 29

Ben Eguzozie, in Port Harcourt NDBDA promises food sufficiency in oil IGER DELTA BASIN DE- region with Songhai integrated agric project VELOPMENT AUTHOR- providing food security to all ITY (NDBDA), Seeks police security for volatile Ogoni farm area Nigerians. We have also set aN river-fed agric initiative machinery in motion to train aimed at propelling rural the youths of the Niger Delta communities in the oil re- Songhai farmland in Kpon, Ogoni, and allow it realize region on skills acquisition gion along food crops pro- for self-reliance and improve duction, is out with a readi- its objectives of providing abundant food, the NDBDA their individual economic ness to flood the markets base,” the MD told the Police with assorted foodstuff from managing director has en- tered into a partnership with DPO at Bori. its multi-million-naira Song- He owned up to the se- hai Integrated Farm at Kpon the Nigeria Police to provide watertight security presence curity challenges within the community in Khana local farm community, lauding government area of Rivers at the farm settlement. He visited the Bori divisional the security agencies for State. changing the ugly narrative. The agency says this police office with top man- agement staff of NDBDA, He said constant presence would help reduce food cri- of police patrol teams within sis in Nigeria, at a time the where the agreement was signed. and around the farm settle- World Bank has projected ments would stave off any that 27 countries, including Tonye David-West said partnering with the Police form of security threats to Nigeria, would experience the project. food crisis in 2020, due to was necessary to provide security to the over 84 hect- He said it was improper to the socio-economic effects work in isolation from each of Covid-19 pandemic. ares of farmland. It is a multi- million-naira federal gov- other, adding that, as part- The NDBDA’s Songhai ners, “I want to assure you large expanse of farmland in ernment sponsored project, which Suleiman Adamu, that we will do the best we Kpon, unfortunately, how- can to ensure that your men ever, is located in a volatile the minister of water re- sources, described as having do not have any problems oil-rich Ogoni area, where in helping us to keep watch years of multifaceted crises the propensity to create tens of thousands of jobs, and over the settlement”. have taken a great toll on The Bori DPO, Bako Ang- the residents, installations of NDBDA. adding that one of the core able people unemployed or provide food sufficiency for Nigerians. bashim called on the NDB- and farms since 1993, when “It is also interesting to objectives of the federal gov- underemployed; Akwa Ibom DA management to consider Ogoni anti-Shell protests know that the farm settle- ernment is food security. comes next with 1.14 million “It is only important we partner with you (the Police) integrating cow grazing since began. Since Shell left Ogoni, ment is capable of provid- Currently, the oil-rich region of its people unemployed. there is abundant green veg- the area has hardly known ing sufficient foods for the is awash with millions of Combined, its unemployed to provide the needed secu- rity to the facilities we have at etation in the settlements; calm – moving from state- Niger Delta region. Our eggs, unemployed youths, who and underemployed popu- that it should also increase sponsored internal military chickens, plantain, banana, are restive. Latest data from lation gross 66.9 percent. In the farms. As you know, we are just about to go into full rice farming in the Songhai oppression to inter-cult and fish and different cash/food the National Bureau of Sta- terms of concentration of project and educate the local gang expressions. crops will soon be on sale. tistics (NBS) say that the oil unemployed people, Rivers, operation after successfully completing the construction youths on the project, as a The farmland is suitable We have about 25,000 birds, region states (Imo, Akwa the nation’s oil hub, which way of diverting their minds for rice farming, fishery, with thousands of eggs,” he Ibom, Rivers, Delta, Edo, is in third position with 43.7 of different infrastructural projects at the Songhai in- from crimes. He also asked poultry, piggery, snail farm- informed. Cross River, among others, percent, however comes the NDBDA management to ing, cassava, yam, sweet He announced that there are leading with the highest first with a whopping 1.7 tegrated farms. Our cardi- nal objective is hinged on provide pipe-borne water for potatoes farming and ba- is opportunity to employ unemployment rates in the million people out of jobs in the local people since their nana, says Tonye David- thousands of youths through country. Imo tops with 75.1 the state. the promise of President Muhammadu Buhari, of water source is contami- West, the managing director direct and indirect labour; percent of its total employ- However, to secure its vast nated with oil spill. N9.6bn Woji-Aleto-Alesa road contract: Okey Ikoro, Owerri-based president economically important – says Gbakagbaka of VEOPAN on Covid-19 impact on sector business a.m. nesia and Malaysia to our Road to link up Port Harcourt’s industrial corridor neighbouring countries and “YOU KNOW THE then they came into Nigeria Ben Eguzozie, Eke described the road as He said the road would help PANDEMIC PUT a lot of under zero duty, especially in Port Harcourt “economically important,” in advancing development of setback in the sectors of the for palm oil. They came in and that its construction the areas. economy. Also, before the under ECOWAS Treaty and ESLIE EKE, THE approved by the Rivers State According to him, the pandemic, due to the mas- that was a great disservice to MONARCH o f executive council, is a well- road, which would also criss- sive proliferation of arms the nation. Woji, an oil-rich intended development judg- cross some virgin forests, and a lot of smuggling across “In the case of refined ing by its economic impor- going by its construction tra- community in the borders by smugglers, vegetable oil, it was being mendous improvement in tance to the people of the jectory, would develop the af- the heart of Port it undermined the federal smuggled across the borders the sector; most of the mori- three communities upon its fected places through which HarcourtL metropolis, which government’s efforts to mas- and this affected the sector bund industries have picked completion. it would pass, and further houses the Shell Industrial sively contained smuggling terribly. That was why there up now, production has in- The Eze Gbakagbaka, tackle the issue of unemploy- Area (Shell IA), is pleased of banned products. was a lot of closure of factories, creased, a lot of people have speaking at his palace in ment in the oil region. that the state government “You will remember that people were not working, and been called back to their job, Woji, Obio/Akpor local gov- “The contract for con- had approved the construc- the federal government closed there was a lot of retrench- a lot of employment has been ernment of the state at the struction of road linking Woji- tion of Woji-Aleto-Alesa road, our land borders even before ment in the sector. going on, and it’s not just that, weekend, said the road would Aleto-Alesa to Port Harcourt, which links Woji with Aleto the COVID-19. The closure of “But for the six months of it has also gingered backward uplift the economic takings of is a noble one. I think it has and Alesa, home to Nige- the land borders proved to the the closure of borders by the integration. Woji, Aleto and Alesa, three the capacity to address un- ria’s biggest oil refinery, the federal government what we federal government last year, “People are beginning to communities referred to as employment and solve other 210,000 barrels per day Port have been crying about, that it was like magic, the sector work at oil palm plantations “Port Harcourt’s industrial economic challenges like Harcourt Refining Company the smuggling of vegetable picked up, factories that were as something doable now. corridor,” housing two petro- access to the industrial area. (PHRC). oil across the borders was closed then started working People who are cultivating leum refining firms (PH 1 & Another possible gain of the He told Business A.M. that massive. And you will recall and then those smuggled oil groundnuts, cotton seeds, oil 2), a petrochemical company, road is easy access to the Port the road, which would cost that refined vegetable oil was could no longer come into palm seedlings, all the seeds two fertilizer firms with over Harcourt Refinery, which de- N9.6 billion, is to be built by among the 41 items prohib- Nigeria. have become in huge demand 3.5 million metric tonnes ca- serves better economic atten- Julius Berger, the Nigerian ited from importation. “If you go to a place like across the country. And be- pacity, and several pipeline- tion,” the monarch said. affiliate of German construc- “Palm oil was not prohib- Togo, Cameroon and all those cause of the attractive price, based companies. Meanwhile, the Eze Gbak- tion giant, Bilfinger. ited but there was about 30 places, they have massive people have now gone back to “This road is of strategic agbaka has warned hood- Last Wednesday, Paulinus percent tax placed on it to tanks where they offload veg- the farm, knowing that if you importance to the entire state lums who may under what- Nsirim, Rivers commissioner enable local producers face etable oil for onward trans- get a basket of palm fruits or and the business world, due ever guise, pose threat to re- for information and com- competition. But what hap- mission to Nigeria in all the groundnuts you can sell it at to its strategic linking to some alizing the job from the Woji munications, announced pened was that most of the northern borders, they were a reasonable price and then of the economic areas of the axis, saying those who engage the state executive council’s oil coming into the country, smuggling vegetable oil into meet the challenges of your state,” Eke, who also is the in such activities would be approval of construction of especially refined and palm the country. family, so it is a very welcome Nyerisi Eli Woji and Eze Oha severally resisted by the pal- the road at the cost of N9.6 oil were coming from Indo- “But there has been a tre- development. billion. Evo III of Evo Kingdom, said. ace leadership. BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 30 TECHNOLOGY & INNOVATION

N THE FINANCIAL INCLUSION report of the Central Bank of Nigeria (CBN), the de- N710bn ATM investment deficit ployment of automat- edI teller machines (ATMs) across the country had been troubles Nigeria’s financial inclusion identified as imperative to giving people access to cash Cash Withdrawal ATM End anywhere for financial trans- 71,000 ATM vacuum bites User Fee; the 2015 Introduc- actions. tion of N65 Cash Withdrawal Even as the country is Issuers, acquirers discouraged by poor economics ATM End User Fee and the also firing up to upgrade 2019 Introduction of N35 the economy to cashless Indications are rife that Nigeria may have to tarry more on its path to achieving Cash Withdrawal ATM End one, evidence abound that User Fee. the economy, by its current robust financial inclusion in the country because of failing investment into Stakeholders have also structure, supports cash noted the discriminatory transactions, given its large some of the channels meant to drive the inclusion, OMOBAYO AZEEZ writes: regulation of ATM Deploy- informal sector in which ba- ment vis-à-vis PoS and Agent sic needs of the 200 million Banking demanding CBN Nigerians are met. prior approval before each As an extant fact, the apex deployment or relocation bank had stipulated in both of individual ATMs with its its 2012 and 2018 CBN Fi- attendant administrative nancial Inclusion Strategy bottlenecks and delays. Documents specific targets for ATM deployment in Ni- In the meantime geria in order for the country Industry watchers have to boast of at least 80 per cent noted that banks have dem- financial inclusion, which onstrated perseverance by shows how important the maintaining a minimum in- ATM channel is. vestment in ATMs to achieve Investigations have the present network size and shown that up till 2020, only service quality. 22,000 ATMs have been de- At the current CBN man- ployed across the country dated N35 End User Fee to serve the growing needs for ATM Cash Withdrawals of Nigerians even as the (equivalent to $0.09 based population of the country on current FX rate in Aug continues to rise. 2020), the fee represents a The achieved number of mere 11 per cent of the 2003 ATMs represents just 23.66 fee, a massive erosion in the per cent of the 93,000 speci- L-R: Oladapo Oshinusi, chairman, Mixta Africa; Deji Alli, executive director/CEO; Benson Ajayi, executive director; Kola economics of deployment fied by the CBN that must Ashiru- Balogun, executive director; and Ugochukwu Ndubuisi, executive director, at the 12th annual general meeting of ATMs which is a high CAPEX be deployed by 2020 in the Mixta Africa in Lagos, recently and OPEX channel. interest of serving Nige- Meanwhile, with corre- rians with cash and non- sponding high FX input due cash functions, whereas the branch rationalizations. corded to all other channels daily basis. ment cost of N10 million to the import dependence chances of meeting up with Although financial and such as PoS terminal, USSD, “The ones we are being against N100 fee per with- of key components of ATMs the number by providing fintech analysts have as- and agency banking overused and there is hardly drawal, it means that the ma- and related spare parts, the additional 71,000 ATMs this cribed the success recorded Consequently, queues a place you will go without chine must perform at leans channel has become largely year is far from being real- since 2003 to synergy of and crowds at ATM locations meeting a queue waiting to 100,000 withdrawal transac- unviable to the banks, ana- istic. three major factors including have become more severe use the machine,” he said. tions before you can realise lysts noted. Meanwhile, analysts who needs, interoperability and and widespread causing From an assessment car- the cost of providing. “This has made it increas- spoke with this paper dur- economics, they identified major customer frustrations ried out, the average ATM in “But if you put the N10 ingly difficult banks to allo- ing an online engagement the need for new modalities across the country despite Nigeria dispenses thrice the million cost against N35 that cate the requisite quantum further explained that the to fast track deployment. the availability and huge number of notes in Ghana we charge now, the ATM will of investment to the channel modest cost of installing an Earlier, the banking in- investments being made to and 10 times the number of have to do close to 300,000 for expansion and service ATM in the country stands at dustry in collaboration with promote these alternative notes in U.K. withdrawals for the cost to quality improvement N10 million excluding cost of the switch developed an channels. be recouped. That is not “Altogether, the ATM has maintenance. economic model for ATMs According to experts, the Poor business case for practicable. We run the ATM failed to meet the CBN Fi- Consequently, work- built around the N100 End low and mid income account acquirers, issuers almost as losses and people nancial Inclusion Targets, ing with this conservative User Fee for Cash With- holders that belong to the The relationship between are not motivated to put in neither has it met consumer amount to bridge the vacu- drawal, an arrangement that bottom of the pyramid suffer key stakeholders in ATM more investments,” one of and market demands for um created by the required offered value to the two key the most from the extremely deployment in Nigeria is not the players said. service quality and network additional 71,000 ATMs stakeholders, ATM Acquirer poor service arising from the so based on mutual wins be- The operators of ATMs expansion,” analysts said in across the country puts the Bank and Card Issuer Bank, crowding. cause of some regulations by in the country have also be- their conclusion of discus- investment deficit at N710 assuring cost-reflective par- This is compounded by the Central Bank of Nigeria moaned the increasing cost sion on the ATM channel billion. ticipation for all the high cost of alterna- (CBN) of providing reliable second- at the recent online brain- Experts have recalled that tive offering, agent bank- This include low profit ary power supply especially storming session. despite obvious need, initial Customer Preference ing, where such vulnerable or outright losses being re- at offsite locations and other ATMs deployment in Nigeria for ATMs consumers are compelled corded by banks deploying soaring expenses on mainte- Last line suffered failed adoption or The ATMs have continued to pay as much as N500 for ATMs, also known as ATM nance, mandated upgrades, Nevertheless, the ATM usage during its first 10 years to rank as the consumer’s accessing funds in their bank acquirers, due to regulatory cash management as well as channel today offers con- of deployment in Nigeria be- number one channel of accounts, which is more than intervention reducing End site rental costs, among other sumers at the bottom of the tween 1993 and 2003 due to choice based on the mod- 10 times the ATM End User User Fees, as well as loss- challenges bedeviling their pyramid the best value such a number of well researched est 22,000 ATMs deployed Fee of N35. es recorded by card issuer operations. that despite the often hav- factors. generating 839 billion in Oladipo Alabede, group banks, arising from ‘Remote ing to travel long distances They warned that CBN transaction volume, accord- head of digital banking at On Us’ Fees on account of CBN’s regulatory impact to neighbouring towns and and all interested stake- ing to data from the Nigerian Sterling Bank, reiterated that the free transactions per on ATM deployment neighbourhoods, Nigerians holders must tread care- Inter-Bank Settlement Sys- while efforts are being made month allowed each card- According to analyst, the in large numbers continue fully to avert a reversal of the tem (NiBBS). to find substitutes for ATMs holder. stunted deployment growth to patronise the ATM with seeming success recorded in This compares very fa- to access cash, the channels The ATM acquirers have rate of ATMs has been direct- all its challenges rather than ATM usage in Nigeria since vourably against 266,039 are costlier. lamented that while the av- ly linked to past CBN policy use some of the more ac- 2003. agents generating just 377 “They end up paying erage cost of N10 million is interventions which have a cessible but more expensive In the last 15 years, it was billion and 303,162 PoS ter- more than they would have required to set up a func- compounded adverse effect alternatives such as Agency gathered that while ATM minals generating 438 billion paid withdrawing from the tional ATM, the process of on ATM economics progres- Banking. This is a signal to deployment had recorded in transaction volume. ATMs. It is clear in our mind recouping such investment sively eroding the channel the need for the regulators slow albeit steady increase, This is consistent with that we have to increase the makes no business sense viability to date and operators to improve at an average of 38 per cent surveys which reveal that number of ATMs that we for the operators because Such regulations high- the channel for the sake of year-on-year to hit 22,000 in consumers rank ATM as have in the country. What of reduction of end user fee lighted include the 2010 IAD desired financial inclusion 2020, bank branches have number one for trust at par we currently have cannot from initial N100 to N35 by Policy requiring banks to exit in the country. declined due to mergers and with the bank branch. This is satisfy bank customers who the CBN. offsite ATM locations’ the far ahead of the trust level ac- desire access to cash on a “When you put a procure- 2012 Cancellation of N100 BUSINESS A.M. MONDAY, AUGUST 24 - SUNDAY, AUGUST 30, 2020 TECHNOLOGY & INNOVATION In Association with 31

these things into consider- Massive data usage, calls, others Data & ation as they will expose you to a potential data breach. to fetch Nigerian telcos N2.9trn Internally, you need to Information ensure that your staffs under- As broadband becomes fastest growing at 78.78m stand the principles of shar- Governance ing data on the international Total internet subscriptions hits 143.3m MICHAEL scale. They must understand home-working, according to the implications of sharing Omobayo Azeez Insight PhD the report. IRENE, data and the responsibilities “While the advent of the Twitter: @moshoke required in sharing this data Y THE END COVID-19 has somewhat Email: mike@mireneglo- and how to manage the data. OF THE YEAR, fast-tracked Nigeria’s digitisa- balconsults.com.ng Training, as I have said in TELECOMMU- tion, particularly at the user other articles, plays an impor- NICATIONS experience level, the opera- tant part of data protection companies in Ni- tional issues that have held schemes and this should be geria offering internet and Thoughts on B back the country’s broadband consistent. With the aspect voice services among others penetration persist. of international data trans- will be mulling revenues international transfers “Operators are grappling fers, it is only important that of as much as N2.9 trillion, the company have the right with the stifling effect of high HERE ARE MANY stakeholders in the recipient latest industry forecast has person. business costs occasioned by questions raised the right questions. These stated. When transferring the ballooning interest expense about the inter- questions can help you gauge This is as the broadband company must consider on borrowings and a bur- national transfers whether or not you should segment of the country’s the security protocols of the densome tax regime, while of data. Stake- transfer data. . telecoms industry evidently transfer. It is a known fact industry revenue is expected the long delays in process- holders ask two main ques- You should be wary about rose to become the fastest T that during transfer, hackers to maintain an upward trajec- ing right of way permits and growing and outpacing rate tions. the existing political terrain tory in 2020, increasing by at their arbitrary costing models prowl sockets and data can of subscriptions to other ser- How a company can en- in the country where you least 15 per cent to around are the main reasons for the fall onto the hands of un- vices in the sector. sure that recipient of this are sending the data. If for ₦2.9 trillion. prohibitive cost of leasing scrupulous elements. There- According to the latest in- data is compliant with data example, there is no attention This is coming on the back transmission infrastructure fore, the company would dustry statistics by the Nige- protection laws and more to the rights and freedom of of the exponential voice and in the country. put into consideration their rian Communications Com- specifically how does one en- individuals in that particular data traffic witnessed in April “This is in addition to the transfer methodologies and mission (NCC), the number sure that the supplier or ven- country, then there will be 2020 during the five-week incessant cost of repairing asking the right questions of active mobile-broadband dor will follow the stipulated existing risks in sending data long restrictions on move- damaged fibre infrastructure about whether or not they subscribers rose sharply by 17 data protection framework of to that country. It is only ob- ment to curb the spread of as a result of cable theft or are using the right transfer per cent year-on-year (YoY) the data controller? vious that the country would the pandemic. damage during road con- mechanisms. Because data to 143.3 million as at 30 June The Nigerian Data Pro- not treat the data of your cus- Agusto & Co’s 2020 Tele- struction, and insufficient transferred over the internet 2020 from the same period tection Regulation (NDPR) tomers well. Paying attention communications Industry electricity supply requiring operate in layer sockets, it is of 2019. answers these questions. to the political and economic Report was released recently, operators to invest heavily in safe to say that the chief pri- MTN with over 60 million However, stakeholders in factors plays an important and it is the most current alternative energy projects vacy officer or chief privacy subscribers or 42.3 per cent data controlling and data role before a transfer is trig- and comprehensive report to power base transceiver officers have to carry out their share of the total subscription processing companies are gered. on voice, data, auxiliary ser- stations (BTS),” the report due diligence to ensure that leads the mobile broadband still confused. As such, this After the company has vices as well as the impact of noted. the existing socket has the market, while Glo and Airtel article highlights the best covered the economic and COVID-19 pandemic on the Agusto & Co further noted right security details. with 26.5 per cent and 26.2 approaches to ensure the political factor, then you want quality and affordability of the network congestion wit- These are not exhaustive per cent shares respectively best that cross border transfer to understand whether the telecom service in Nigeria. nessed during the COVID-19 methods, and depending on occupy the second and third approach. data subject has given you According to the report, lockdown owing to the spike the service delivered, there positions. There are three things that the right to share data to the the entire telecoms market in data traffic brought to the are different approaches to The fourth largest Mobile a company must pay atten- international company. And in Nigeria was estimated in fore the inadequacies in the international transfer. Com- Network Operator (MNO), tion to according to the data more importantly, if you have the region of ₦2.5 trillion in country’s communications panies must understand the 9mobile, is the smallest of the protection regulation when ensured that the transfer is for 2019 with MTN accounting infrastructures. implications of transferring four operators with just 4.9 considering an international you to carry out contractual for nearly half of the indus- While discussions around data to service providers per cent of the GSM internet transfer. obligations or performance of try’s revenue in the same additional spectrum for outside Nigeria and how to subscriber base. The first one bothers on a a service. The onus, therefore, period. network operators and the do it properly. To avoid expo- Generally however, sub- critical aspect. The company is on you to ensure that you Coming out of the pan- declaration of communica- sure to breaches, companies scriptions to 3G and 4G LTE, should be asking questions have clearly stated in your demic, millions of users in tions infrastructure as critical should test their international which are categorized as whether the country where customer-facing privacy pol- Nigeria are more connected, national assets continue to transfer systems, find the broadband services by the they are sending data to has icy how data will be shared better educated and familiar dominate debate within the risks and mitigate them im- NCC standard, have grown safeguard measures and and to who will have access with digital tools. In the same industry, the rating company mediately. to 78.78 million, equivalent to technical abilities to manage to their data. This principle vein, network operators have believes addressing some of 41.27 per cent penetration at data i.e. encryptions, secu- guarantees transparency and gained first-hand experi- these operational challenges the end of H1, 2020. rity policies etc. Technical lets the customer understand ence in dynamic network will improve the accessibility According to Agusto & Co, abilities is much more than that you pay attention to traffic management, while and affordability of telecom Nigeria’s foremost research reading privacy policies. It organisational and technical businesses and their telco services in Nigeria and en- house and rating institution is also ensuring that you, as measures when it comes to partners have a better under- sure sustainable growth for *Dr. Irene is Data Protec- which made the latest pre- the sending party, prepare taking care of their data. You standing of the challenges of key players. tion Consultant and writes in dictions, Nigeria’s telecom some questions and ask the will be amiss if you don’t put from London.

Omobayo Azeez networks to telecom con- the outbreak of the pan- Danbatta charges operators on QoS sumers. demic. MAR DAN- quality of service they serve Covid-19 on Telecoms Ser- Citing an International Regardless of this, Dan- BATTA, THE their customers. vice Delivery.” Telecommunications Union batta said the commission EXECUTIVE The EVC also listed criti- (ITU) report, the EVC said and the mobile network op- VICE chair- He made the call at the cal regulatory actions that with the pandemic, some erators needed to play their man of the Ni- first edition of the Virtual have been taken by the telecom operators and plat- roles in sustaining qual- gerianU Communications Telecom Consumer Parlia- commission to mitigate the forms are reporting demand ity of service delivery and Commission (NCC), has ment (V-TCP) hosted by the impact of the COVID-19 spike, especially in data us- quality of experience by the charges telecoms operators commission in on Friday, pandemic on quality of ser- age and volume of calls, as consumers, who are critical in the country to scale up the with the theme: “Impact of vice (QoS) delivery by the high as 800 per cent since stakeholders in the telecoms Monday, August 24 - Sunday, August 30, 2020 business Follow us

businessamlive @businessamlive @businessamlive businessamlive Media TOWARDSa.m. MORE EFFICIENT MARKETS Latent, potent forces against Africa’s prosperity in continental free trade:(1) thus prefer tariffs to free trade to ple. The recent turning of North the Economic Policy Institute, a tal exports, and almost 60 per shore up their revenues. African countries southwards to think tank, once observed that cent of this 10 per cent is rep- Or, take currency convert- the Sub-Saharan Africa for part- NAFTA’s failure has cost the US resented by cocoa. The import ibility. This, defined – according nership presents an opportunity jobs across the nation. Since the profile, however, is not encour- to the International Monetary for AfCFTA. Although this does NAFTA was signed in 1993, the aging as ECOWAS imports are Fund (IMF), as the right to con- not erase their trading partner- rise in the US trade deficit with more diversified, with a high vert freely and without limit a ship arrangements with Europe, Canada and Mexico through share of industrialised prod- currency into any other at the the turning of attention to their 2002 has caused the displace- ucts. Refined petroleum, vehi- OLUKAYODE prevailing exchange rate – is the own continent should step up ment of production that sup- cles, ships, telecommunications lynchpin of today’s globalised their engagement with the Sub- ported 879,280 US jobs. Most of equipment and food products OYELEYE world economy. It remains a Saharan Africa (SSA). those lost jobs were high-wage such rice and wheat dominate Dr. Oyeleye, a public problem in almost all of Africa’s Lately, Egypt is showing con- positions in manufacturing in- imports into the sub-region. The health veterinarian, regional economic blocs. Within cerns about the dam that Ethio- dustries. The loss of these jobs trade asymmetry puts ECOWAS and between all the regional pia is building on the Nile River. is just the most visible tip of at a disadvantage as the sub-re- journalist and policy economic blocs in Africa, a huge Some North African countries NAFTA’s impact on the US econ- gion’s main trading partners are analyst, can be reached task lays ahead. The East African are desperately searching for omy. NAFTA has also reportedly highly industrialised countries via: oyeson2@yahoo. Community (EAC), for instance, new markets to position them- contributed to rising income in- and advanced economies in Eu- co.uk still wavers while efforts by the selves for economic and demo- equality, suppressed real wages rope, North America and Asia. region’s central banks to ensure graphic growth expected in SSA for production workers, weak- Trade figures differ consid- Twitter: full convertibility of regional in years ahead, in particular as ened workers’ collective bar- erably between West African @OlukayodeOyele1 currencies, operate reciprocal the growth of traditional Euro- gaining powers and ability to countries. Over 73.5 per cent accounts and reduce reliance on pean partners suffer a decline. organise unions, and reduced of total registered ECOWAS ex- the US dollar are facing hurdles North Africa is undergoing a fringe benefits. Could these be ports are attributed to Nigeria, and member countries still re- regional reconfiguration. Hith- the motivation for President mainly as petroleum exports ONDAY, LAST luctant to pay as well as receive erto known to be more of Middle Donald J. Trump to replace NAF- and the size of earnings from WEEK, was the payments in regional curren- East North Africa (MENA) bloc, TA with the US-Mexico-Canada such exports. On the import day of official cies, hoping for the transition to things seem to be changing. The Agreement (USMCA), which side, Nigeria still leads other handing over a monetary union. failure of regional integration in won broad bipartisan support ECOWAS countries with 52 per and commis- While the 16-member Com- North Africa is driving a strong on Capitol Hill and entered into cent of general commodities Msioning of the secretariat build- mon Market for Eastern and affinity for the SSA. North Africa force on July 1, 2020? and 51 per cent of food imports. ing of the Africa Trade House in Southern Africa (COMESA) is more vulnerable in relation to Trade policies often have a Nigeria’s role in the new Af- Accra, Ghana. The ceremony, could provide good insights food security and depends enor- different impact on economic CFTA will therefore be crucial. attended remotely by many par- and some remarkable achieve- mously on food importation. But agents due to the transmission The other countries ranking af- ticipants from outside Ghana – ments, other regional groupings the region appears to be ahead mechanism through which they ter Nigeria in the sub-region – all over Africa – through online of Southern African Develop- of the SSA in technology, health operate. Following the logic on namely Ghana and Côte d’Ivoire medium, marked the beginning ment Community (SADC), Eco- and renewable energy. Libya, NAFTA’s liquidation – that NAF- – are dependent on food exports, of the African Continental Free nomic Community of West Af- however, has been an exception TA was benefitting Mexico more especially cocoa and banana. Trade Agreement (AfCFTA) op- rican States (ECOWAS) as well as it has been partnering with and hurting the US economy Nigeria follows closely behind. erationally from its permanent as the Middle East and North SSA countries for a long while. and social security – AfCFTA It is important to be concerned operational base. The Corona- Africa (MENA) are not compa- Morocco returned to the AU is expected to have the double about the impending negative virus pandemic-induced lock- rable. At the ECOWAS level, a in 2017 after 33 years absence. edged strategy on Africa. The food trade balance in West Af- downs had delayed the move- discordant tune still sounds on Its strategic economic interest in ECOWAS Trade Liberalisation rica, the signs of which have ment of headquarters to Accra the confusion of Eco currency. a more vibrant SSA was evident. Scheme (ETLS) and the Com- been showing for a while. The and the commencement of op- The Eco, originally planned by With foreign direct investment mon External Tariff (CET) at the region’s dependence on export erations, earlier billed for July the ECOWAS bloc, and meant (FDI) totalling nine billion Eu- West African sub-regional level earnings to finance a growing 1, about a year after the July 7, to cover the region, was brought ros by 2017, Morocco became a have been criticised for unequal share of imported food products 2019 AU extraordinary meet- in by the WAEMU countries leading investor in West Africa impacts on all parties. Their such as rice, wheat, processed ing in Niamey, where AfCFTA through the backdoor in contro- and second only to South Africa implementation seems to be a food, fish, sugar, milk products, was deemed to have been for- versial circumstances. Of note as the largest African investor in nightmare for Nigeria, for in- vegetable fats and oils, tobacco, mally launched. Now that this yet was also the proposed Eco Africa. In 2016, the Phosphate stance. Concerns over abuse are meat and vegetables is worri- ambitious project has been es- currency convertibility under OCP conglomerate signed a huge real, and appears to be Nigeria’s some. A situation arising there- tablished, a lot has to be done the WAEMU. deal with Nigeria in exchange major reason for foot dragging from is now that of a region with to steer Africa away from eco- An integrating Africa must for a gas pipeline from Nigeria, in trans-border trade under ex- an exceptional potential for nomic isolationism and boost work very hard to avoid rever- and also signed a deal for fer- isting protocols. The CET is ex- food production but importing Africa’s economy while also sals of steps. In particular, Afri- tiliser production in Ethiopia. A pected to create a uniform tariff more and more food items. The minimising the downsides of can countries need to overcome shift in ideological to social and system among member states, increasing purchasing power as economic development. their vulnerabilities in bilateral economic pragmatism, which discouraging importers from a result of commodity booms, a Bold and forward-looking as trade arrangements with big- were probably responsible for diverting their cargo to neigh- fast growing population, a in- AfCFTA may seem, there will be ger countries. They are better off these deals, could help AfCFTA’s bouring countries and, conse- creasingly urbanising region gainers and losers, enthusiasms bargaining en bloc. Size matters take off and progress. However, quently, reducing smuggling and a growing middle class all and reservations, applause and in negotiating power. We are told ECOWAS’s tardy and uninspir- in the region. But, Nigeria has seem to have created more de- discontent, good times and bad. that China is now Africa’s big- ing response to Morocco’s appli- repeatedly accused neighbours mands for foods, which are not It will do a whole lot of good to gest trading partner. But, imag- cation to join the sub-regional of the same infraction, given as met by sufficient and adequate avoid sweeping any potential ine how strong the negotiating bloc could be a warning sign that excuse for closing the Benin-Ni- local food supply. landmines under the grass. power of a tiny Benin Republic, Morocco’s imports could erode geria border in 2018. Excessive focus only on trade Commencing a regional trade or Gambia or Lesotho could be in local manufactures within West and its benefits without atten- bloc of the size of AfCFTA when bilateral trade negotiations with Africa. Moreover, the fear that What obtains in one region tion on these existential threats small sub-regional blocs have China. It is thus important to Morocco’s free trade agreements may be shared experience in could bode ill for Africa in the not proven any exceptional or use a continent-wide trade plat- with the European Union (EU) others. Africa’s economy has not-too-distant future. Promot- outstanding success should be a form to fend off external threats and the United States (US) may relied heavily on commodities. ers of regional trade must there- reason to be wary. This is more from more powerful external open a back door for goods from ECOWAS exports, for instance, fore keep in mind that trade so when there are obvious so- interests that could put African those countries into West Africa, show little product diversity, is not done in isolation. It goes cial, economic, administrative, countries’ competitiveness in thus engendering unfair compe- with a heavy reliance on extrac- with many social, economic environmental, legal and other global trade in jeopardy. On the tition, could be real. tive products such as petroleum and political consequences. existential hurdles that could flip side, however, sovereign in- Despite the consensus of and natural gas, and a few agri- Before we roll out the drums to pose real threat to its take-off terests may prevent even the opinions about regional trade cultural commodities, particu- celebrate AfCFTA, let these and and continued existence. Pro- weakest country from disclosing groupings, experiences would larly cocoa, rubber and cotton. other issues to be discussed lat- tectionism could still hold back its strategic national interest on still serve as a useful guide. Trade data when not disaggre- er be factored in and necessary progress as many regional eco- the continental platform dur- The North American Free Trade gated, tend to project nebulous safeguards put in place right nomic blocs were retarded by ing bilateral negotiations. For Agreement (NAFTA), a treaty picture. When disaggregated, early, and monitored as prog- the preference of countries for instance, many countries are fo- entered into by the US, Canada however, it is easy to see that ress is recorded. Only then can tariffs as major sources of rev- cusing on responses to the rising and Mexico, went into effect on official ECOWAS food exports Africa be said to be truly ready enues. Some countries may security threats and flow of peo- January 1, 1994. In a publication, represent only 10 per cent of to- for this idea of free trade.

Published by Businessnewscorp Limited 10B Stella Osholanke Street, Off Internationnal Airport Road, Ajao Estate, Isolo Lagos. Tel: +234 (0) 803 5555568; Website: www.businessamlive.com; e-mail: [email protected]