Category: Special Report

Eight years after Non-interest banking started in Nigeria, the idea is fast catching on as corporate entities both public and private are developing financial products and services to attract Nigerians. Assistant Editor NDUKA CHIEJINA looks at that journey so of non-interest banking

Non-interest banking in Nigeria is a relatively new concept that is fast gaining mass appeal and converts. Non-Interest banking is an alternative financial service to conventional banking services available to all irrespective of religious inclination.

It is a growing global financial services experience that can be found in many countries and institutions across the world, including the United States of America, China, United Kingdom, Canada, South Africa, Kenya, Singapore and Malaysia. HSBC, Citibank and Barclays Bank are among the list global banks that have embraced non-interest banking products and service.

A distinguishing factor between Non-Interest (Islamic) banking and conventional banking practices is that non-interest Islamic banking is based on adherence to the Sharia or Islamic law. It offers services, products and instruments based on compliance to Sharia law.

Such institutions do not give or receive interest nor finance anything that is against certain religious practices like the sale and consumption of alcohol, tobacco and gambling. They also avoid speculation, extreme uncertainty and deceptive trades while upholding the precepts of rewards, equity, fairness and justice.

Sharia prohibits payment or acceptance of interest charges (riba) in financial transactions, as well as carrying out trade and other activities that provide goods or services considered contrary to its principles.

Money in Islam is viewed purely as a medium of exchange and under Sharia law, administering interest can lead to injustice and exploitation.

Non-interest banking is fast becoming attractive to individuals and corporate bodies because it offers a captive market of about 50 per cent of Nigeria’s population many of whom are outside the banking space.

The attraction to non-interest banking is hinged on its philosophy of ethical banking services which provide for socially responsible investment outlets and the orientation that both the bank and its customers share profit and loss. Besides, the mode of financing is mostly on mark-up, rent, leasing and partnership basis.

Jaiz Bank leads the way

Jaiz was incorporated in April 2003 as a Special Purpose Vehicle (SPA) called Jaiz International Plc. It was granted an operating licence on the 1st of November, 2011 and commenced full Non-interest banking operations in January 2012.

Jaiz Bank PLC is a publicly quoted national bank owned by over 26,000 shareholders spread over the six geo-political zones of Nigeria. In the eight years of the bank’s existence, its balance sheet has grown from N12 billion in 2012 to about N62 billion, with asset financing of over N30 billion.

Nigeria’s premier Non-Interest Bank in Nigeria started with a regional license obtained from the Central Bank of Nigeria to operate in the Northern part of the country but quickly became a National Bank on May 12, 2016 with presence in all the geopolitical zones of the country.

The Managing Director of the bank, Mallam Hassan Usman, said the bank operates ethical and non-interest banking according to Islamic tenets, however, the bank’s products are open to all Nigerians irrespective of religious leanings.

According to him, “we are the face of a new concept in banking. One important point we will continue to emphasise is that Jaiz Bank products are not religious products. They are open and available to all, irrespective of their faith or religion.”

JAIZ bank, he said, does everything other banks do and is regulated by the Central Bank of Nigeria. “The only thing that separates us from conventional banks is that there are ethical principles which we believe that bank and customers must meet before transacting business. For instance, Jaiz bank will in no way open an account or transact business with a beer-brewing company or a manufacturer that is into pig rearing or gambling business.”

On the bank’s partnership model, Usman explained that “it is a mode of financing that tries to address human needs directly by providing goods and services on a payment basis different from conventional banking that we know.

“Literarily, that is what non-interest or Islamic banking is doing anywhere in the world. It is about providing financing to people who cannot afford to buy directly with their resources at a time.

“So, rather than give money, we provide the services and goods people are looking for to meet their consumption needs or businesses. We have seen from our operations so far that all manner of persons come to us and we do business with them. This, I believe, is what we have been doing.”

Jaiz bank has a balance sheet size of N152 billion (as at September 31, 2019) from N12 billion in 2012. Its financing assets have grown from over N30 billion in 2012 to N138.84 billion (as of September 31, 2019). As at the end of the third quarter of 2019, Jaiz Bank made a Profit After Tax of N1.25 billion.

Other critical parameters such as customer deposits, branch network and profitability have also been growing year-on-year since inception.

The bank employs three methods of making profits, firstly, through buying and selling; that is, it buys an asset and sells at a profit. Because of their nature, Islamic Banks are the only institutions authorized to engage in trade.

Secondly, the method is through leasing. Under the leasing arrangement, the Bank can finance a factory’s need for equipment and machinery and then lease out the same on a rental basis.

The third profit-making mechanism the bank uses is through partnership. Here, it can go into partnership with either an individual or corporate body on a joint venture which is based on a pre-agreed profit and loss sharing formula. Under this arrangement, both parties can jointly contribute capital to a business and then share profit or loss based on agreed ratios.

As a partner, “an Islamic Bank will simply buy the product and sell to the importer at a mark-up. It can also go into partnership with a Real Estate developer, build houses, Industrial Estates, etc, and share in the profit according to an agreed proportion.”

Financial Performance

Evidence of a growing interest in Non-interest banking manifested when Jaiz Bank broke-even in its third year of operation and graduated from a regional to a national bank with branches increasing from three at the start of operations in 2005, to 39 branches spread across most of the six geopolitical regions in the country.

The bank recently released its 2019 audited results for the period ended December 31, 2019, declaring a Profit After Tax (PAT) of N2.4 billion. This represents a massive leap of 193 per cent from N834.4m realized in the corresponding period of 2018.

In the report submitted to the Nigerian Stock Exchange (NSE), the Bank declared a 135 per cent growth in Profit Before Tax (PBT) for the period under review from N879.7 million as at December 31, 2018 to N2.1 billion as at December 31, 2019.

Key extracts of the report showed that Gross Income grew by 80 per cent to N13.5 billion as at December 31, 2019 from N7.5 billion in the previous year, while the Bank’s Total Assets also grew by 54 per cent to N167.27 billion from N108.46 billion. Attesting to the increasing public interest in Islamic finance products, earning per share surged up to 8.30 as against 2.83 kobo in 2018, signifying an increase of 193 per cent.

Commenting on the impressive performance, Usman said: “The major driving force was the deliberate efforts to satisfy our customers, who were evident in the significant growth in the deposit base and risk asset portfolio.”

During the year under review, the bank deepened its support for the MSME sector with targeted intervention to meet the diverse needs of promising small-scale entrepreneurs. The bank also made banking comfortable for its customers by investing in IT infrastructure and improving its E-banking channels.

Islamic banking meets conventional banks

The business potential for a Non-Interest Bank in Nigeria is enormous. Jaiz Bank’s strategic business focus is mainly in retail banking, though it offers corporate and commercial banking services.

The bank’s retail focus enables it to service a large number of Nigerians who don’t want anything to do with Riba (the lending of money at an exorbitant rate of interest) in their daily activities.

Banks usually make a profit from the buying and selling of approved goods and services, so banks and financial institutions trade in sharia-compliant investments with the money deposited by customers, in the end, sharing the risks, and profits between them.

Non-interest/Islamic banks are structured in such a way that they retain a differentiated status between shareholders’ capital and clients’ deposits to make sure profits are shared correctly.

Although they cannot charge interest, the banks can profit from helping customers to purchase a property using an ijara or Murabaha scheme. With an ijara scheme, the bank makes money by charging the customer rent; with a Murabaha scheme, a price is agreed at the outset which is more than the market value. This profit is deemed to be a reward for the risk that is assumed by the bank.

Under the conventional interest-based system, deposits are taken as loan from customers to the bank and a fixed return is guaranteed to depositors regardless of the performance of the institution. Islamic banks, on the other hand, receive deposits to invest them on behalf of depositors and shareholders, and the profit is shared between depositors and shareholders.

Conventional banks give loans at a fixed rate without any risk on their part while under Islamic banking system, the bank shares the profits and losses from investment and bears the risk of investment.

Others follow

Non-interest or ethical banking as it is called has become so popular that government agencies are now embracing the concept and adapting it to suit their needs. Last week, the Central Bank of Nigeria (CBN) announced that it will integrate Non-interest window in all its intervention programmes, particularly the Anchor Borrowers’ Programme (ABP) and the Targeted Credit Facility (TCF) to support households and Micro, Small and Medium Enterprises (MSMEs) affected by the COVID-19 pandemic.

This Non-interest based intervention of the CBN will start from the Northeast and Northwest before moving to other parts of the country.

Aside from the CBN, some corporate institutions have adopted a sharia-compliant product as a tool for meeting their financial needs. The Debt Management Office (DMO) has raised three tranches of Sukuk bonds for the financing of road infrastructure across the country. The Osun state government some years back raised Sukuk bonds to fund some infrastructure projects in the state.

Some private sector operators have joined the Non-interest bandwagon. These include Sterling bank, Taj banks, Lotus Capital, Noor Takaful, Cornerstone and Leadway Insurance Companies, Tijjara Microfinance bank, Zenith Bank and Stanbic IBTC which recently closed its Islamic banking window.

In insurance, the Nigeria Insurance Commission (NAICOM), the sector regulator has granted operating licenses to two takaful insurance firms, bringing to four the number of insurance firms offering takaful insurance.

Challenges

In the eight years that Non-interest banking has been in existence in Nigeria, there have been challenges which operators like Jaiz bank have had to grapple with.

One of such challenges is the low awareness of the existence and operation of Non-interest banking and what it is all about. The promoters of non- interest banking, like Jaiz bank plc and others driving non-interest banking window as alternative banking, need to work extra hard to etch it to people’s consciousness.

The low awareness about the opportunities and economic benefits inherent in non-interest finance services deny many Nigerians the opportunity to reap the benefit.

Sharing his hands-on experience as CEO of the first non- interest finance institution in Nigeria, Usman said: “being the only one of a kind within the Nigerian financial service eco-system over the past seven years, it has taught us a lot of lessons. Our experience over the years ranged from the good, the bad and something in between”.

Another area of concern to operators of Non-interest banking Usman lamented is the dearth of manpower sufficiently skilled in Islamic finance, a challenge the bank grappled with right from the onset.

According to him, “to get around the manpower jinx, we started with a mix of experienced conventional bankers and fresh graduates. Some employees had so much passion for Islamic banking that they sacrificed higher pay elsewhere (i.e. took salary cut) to join the bank.”

He added that “some employees came with the wrong notion that the work environment of an Islamic bank should not be performance-driven. Shariah should be lenient (accept mediocrity).”

Jaiz bank, he said, paid the price as “the first mover” through high employee turnover as a result of the entry of new operators into the market”, he said.

The Federal Government relies on the oil sector for a large part of its revenue. But growing sectoral revenue requires new thinking and policy that promote efficiency and reduced cost of production. The Nigeria National Petroleum Corporation (NNPC’s) commitment to efficiency and improved earnings prompted it to target cost reduction initiatives to boost efficiency and profitability of its operations. The corporation is targeting $10 crude oil production cost by 2021, a plan expected to raise its contributions to Gross Domestic Product (GDP), foreign exchange earnings and funding for the national budget, writes COLLINS NWEZE.

Efficiency in operational cost and profitability of businesses are two elements every thriving enterprise will never take for granted.

Reason being that there are two ready ways to keep an organisation going strong. First is to make more money through improved profitability. The second option is to efficiently reduce cost of operation.

In the oil and gas industry, analysts insist that  operators plenty of firepower to develop multiple revenue streams and reduce productional cost will keep winning.

For the Nigeria National Corporation of Nigeria (NNPC), adopting diverse revenue stream and reducing cost of operation remain priority.

For instance, NNPC Group Managing Director,  Mele Kyari announced that the corporation was working on reducing its cost of production per barrel of oil to $10 by 2021.

Stakeholders have described the plan as ambitious but plausible, given the many benefits that will come with reduced cost of production per barrel of oil.

Providing more details on how the scheme will be implemented, NNPC Chief Operating Officer, Ventures and Business Development, Roland Ewubare said the $10 crude oil production cost mentioned as production cost is an aspirational figure.

“We look at where we are coming from in terms of cost and what the larger cost drivers are for us in the industry. Against that backdrop, the conversation about cost becomes an imperative and urgent one. You have to understand that at the macro-economic level which you focus on a lot on your programme, crude oil is the backbone of our economy,” he said.

Explaining further, he said its contribution to the Gross Domestic Product (GDP) is  between seven and 11 per cent depending on the year in question, but as a contributor to the foreign exchange earnings and national budget is massive.

“Whenever you have a price regime like we have right now, where commodity prices are low, the only way we are able to squeeze out some reasonable cushion in terms of cash and financial gains to the federation is by containing and constricting our costs,” he said.

Ewubare said the corporation’s costs are driven by a multiplicity of factors, including personnel, as the the oil and gas industry in Nigeria probably pays the highest salaries, higher than than banks renumeration.

“That is a huge part of what we spend money on. The environment in which we operate, our primary production base in the Niger Delta, still have issues around security, militancy and all of that. So, all of those add an extra layer of cost to production. There are many countries in this world where their citizens don’t vandalise national infrastructure. So, they don’t have the added cost that we have,” he said.

For NNPC to move equipment to an offshore location, it needs mobile policemen loaded with weapons and that comes with added cost. “But to address that question, $10 is an aspiration. When are we getting there? We are looking very actively at hitting that threshold before the end of quarter four of 2021. It’s an aggressive target for sure”.

Ewubare, said the current cost structure was a fallback from the high commodity cost regime a few years back of about 100 to 110 dollars per barrel.

“Some of the projects that were sanctioned at that time used that price point based on certain assumptions. Now that prices have gone down, it will take a while for the industry to recalibrate and readjust to a more reasonable cost regime. It’s a work in progress, but we are certain that at the end of next year, we will be able to get to $10 per barrel as our operating cost. For our technical costs, they are a separate matter,” he said.

In area of research and development, he said the NPDC, the flagship Exploration and Production company’s peers are Shell, ExxonMobil, Chevron and such other indigenous companies.

“So, when we talk about reducing cost, if we tell the International Oil Companies’ to reduce cost and then our own in-house Exploration and Production company carries a cost profile that’s exaggerated, it’s not sustainable. So, the same tactics and pressures we apply to those major partners, we apply to Nigerian Petroleum Development Company-NPDC  as well”.

“Technology and innovation is key and interesting, but for now we are not using research and innovation to try and cut down our cost. In my initial remarks, I said the costs we have are a relic of the days of high prices, a relic of the environment in which we operate. Yes, we can use technology to address some security issues in the Niger Delta, for example,” he added.

“But there is only so much technology you can use to reduce headcount and human beings in a country where we have high unemployment in terms of our critical workforce and our talent pool.  We have very limited places where we can apply the hammer and trim some excess fat. We have ideas in place in NNPC to sort of diversify our income stream so that we are better able to manage this boom and burst circle which characterises the oil and gas sector”.

“The oil and gas sector as you well know works in a boom and bust circle and many of our competitors and service companies set up other businesses to manage them. So, when you have low oil prices, you make some money from somewhere else”.

Also speaking, Professor Emeritus of Petroleum Economics, Louisiana State University (LSU)  Energy Studies, United States,  Wumi Iledare,  said said, NNPC’s move to reduce crude oil production cost is good for the economy and should be supported.

He said the corporation has what is required to achieve targeted $10 per barrel lifting cost, which will enhance revenue for the country.

Prof. Iledare said the corporation has the potential to achieve the reduced production cost plan.

He said Nigeria has made a lot of investment, and now is the time to to ensure that its operating cost does not cross certain threshold.

He said that Nigeria’s oil lifting or production cost  has been high, adding that achieving $10 target will be of great benefit to the economy.

Prof. Iledare, who is also National Petroleum Corporation (GNPC) Research Chair in Petroleum at the University of Cape Coast  Oil and Gas Institute,  Ghana, said maintaining a good efficiency ratio in crude oil production has many benefits, including more revenue earning for the corporation.

He said that technical  cost used to be about $4 per barrel and lifting cost about $2 per barrel in the 70s and 80s, on average before they rose.

Additionally, he said low cost efficiency ratio relative to price and indirectly low cost per barrel increase profit that government take because every dollar saved is taxable.

He advised government to monitor cost and benchmark it along with adaptation to global best practice. “One the factor affect cost dynamics is administrative cost! Reducing inefficiency in the governance of the sector is important.  Some trimming of unproductive activities of some departments may be inevitable,” he said.

Asked if such excise is timely, given the softened crude oil prices, he said:”This should be part and parcel of the way to do business. Cost management strategy is critical to maximize returns on investment. More so when the price of oil is low and market is soft”.

Lagos-based Energy expert, Stephen Abiodun, described the  corporation’s move as aggressive but necessary step needed at promote economic growth and development.

He said with the drop in Nigeria’s foreign exchange earnings, there was need for agencies to find new ways to earn money for government. “The NNPC will make more savings and revenue as it begins to reduce cost of its operations and crude oil production cost per barrel,” he said.

According to him, the NNPC’s plan to create other streams of revenue that might help during downturns will be positive for the economy through improved earnings.

Cultivating Other Revenue Streams

On other ways the corporation want to make money from, Ewubare said the NNPC has a seismic company, IDSL, in Benin for example, which I was Managing Director of, it was a very small company six to seven years ago, but last year the company posted revenues in excess of $100 million.

“That’s still not too much money, but in an environment where you are looking for every penny to run the national budget, it is critical. We have an engineering company in Lagos called National Engineering & Technical Company Limited (NETCO), that’s the national engineering and technical company. NETCO historically couldn’t pay staff salaries, but because of the work we have done in revamping all these businesses, NETCO only last year did over $150 million in revenues”.

“Now, they are totally independent and paying their own salaries and are able to contribute and stream dividends into the NNPC and to the federation. So, there are different ideas and plans we have in place to diversify the income base of the corporation for the greater good of the nation and over the next few months you will see these things rolling out. Covid-19 has slowed us down a bit, but we are sure that we will get back to business’s.”

If you take a historical timeline of oil and gas, you will know it’s a boom and bust cyclical waves. So, what most operators do is to create other streams of revenue that might help during downturns.

New projects raise hope on operations

NNPC Group Managing Director, Mele Kyari said the $2.8 billion AKK gas pipeline project is scheduled for completion in 2022.

The corporation, said it won’t sanction a $2.8 billion without doing basic due diligence around environmental assessment and feasibility.

“The Ajaokuta Kaduna Kano (AKK)  is a massive project. It’s a 620 kilometre gas line that’s going to run from Ajaokuta to Kaduna and into Kano. When it is completed, it can transport a fully loaded two billion quantity of gas on a daily basis. It’s massive and the whole idea is to have that whole gas infrastructure in place. Wherever you have gas or energy, development follows”.

“That means that northern Nigeria corridor will now be open for significant expansion in terms of industrial capacity. The line is going to service various gas-based industries, but it’s primarily for three major power plants in Abuja, Kaduna and Kano”.

“Abuja is 1,350 megawatts, I believe, Kaduna the same size and then Kano is 900 megawatts or so. So 3,600 megawatts of electricity will come from these and you add that to national grid and you begin to see the multiplier effect on industrialisation and impact on the lives of people. It’s a major investment and it should be up for commissioning in 2022 by our current aspiration”.

For years, the Niger Delta Development Commission (NDDC) has operated from a rented apartment. That is about to end, writes CHINAKA OKORO

When I enter a place, I must leave the place better than I met it.” Those were the words of Minister of Niger Delta Affairs Godswill Akpabio when he addressed the management and staff of the Niger Delta Development Commission (NDDC) during a visit to the agency in its rented headquarters on Aba Road, Port Harcourt, Rivers State.

Akpabio, the supervising minister for the  interventionist agency, was shocked that the commission was paying over N200 million as rent yearly for the place. According to him, “the situation is disheartening.”

He then resolved: “The era of NDDC paying rent for its corporate headquarters is gone for good.”

The minister was not unaware of the challenges of funding, but he seemed to have worked it all out. To him, “money to complete the building can be realised in a month, if NDDC’s management chooses to.”

Today, the NDDC has responded to the minister’s challenge to pool resources to complete its new head office complex. Its Interim Management Committee (IMC) led by Prof Kemebradikumo Pondei worked round the clock to deliver the project.

The count down to the inauguration has begun, as Pondei said he was looking forward to inviting President Muhammadu Buhari to inaugurate the 13-floor new permanent headquarters on the Eastern By-Pass, Port Harcourt.

From all indications, the President is set for the historic event. In his Democracy Day  broadcast, the President pledged: “The Head Office of the NDDC will be commissioned shortly.”

The headquarters is a project to be proud of. Little wonder that Pondei describes it as an impressive and befitting testimony of what the NDDC is capable of achieving.

Shortly on assuming office, he swung into action to turn things around. After a careful assessment of the challenges militating against the project, Pondei held a crucial meeting with the contractors to iron out the knotty issues.

The problems were quickly cleared to pave the way for the contractors to go on full throttle. The elimination of the encumbrances, demonstrates the determination of the interim management to weave a positive story around the multi-billion naira project.

Pondei”s first major assignment outside the NDDC was the inspection of the permanent headquarters complex.

He was accompanied by the Acting Executive Director, Projects, Dr. Cairo Ojougboh; the late Acting Executive Director, Finance and Administration, Chief Ibanga Bassey Etang; Mrs. Caroline Nagbo and Cecilia Akintomide, who are members of the IMC.

They were joined by virtually all the directors of the commission in the on-the-spot assessment of what needed to be done to break the jinx of non-completion of the magnificent building that has changed the skyline in the Marine base area in the Garden City.

At the site, which was then shackled by the contractors’ scaffolding, Pondei expressed satisfaction with what he saw, noting that the new headquarters would provide a secure and conducive working environment for staff.

He said: “We must make sure that this edifice is completed and handed over to Mr President for commissioning this year.

We will give the contractors all the necessary support to ensure that the project is completed expeditiously without compromising on quality and approved designs.”

Pondei added: “The IMC is changing the way things were done in the past and we are determined to work as a team.

The Minister of Niger Delta Affairs charged us to change the way things are done in NDDC and focus on executing legacy projects that will impact lives in the region.”

According to him, the commission is anxious to complete the project so as to add value to the work of the NDDC towards meeting its mandate of facilitating the rapid development of the Niger Delta.

The IMC’s determination to complete the project has paid off as NDDC will soon be relocating there. Barring delays occasioned by the COVID-19 pandemic, the movement to the “promised land” is expected to start very soon.

The Project Manager, Clement Udie, an architect, said in March that the building, which was initiated by the defunct Oil Minerals Producing Areas Development Commission (OMPADEC) in 1996 was now virtually ready.

He said  apart from the 13-storey main building, the complex also includes a four-storey ancillary building, gate house and security blocks. “Other facilities include drains, paved walkways, parking lots, retaining wall, sewage treatment plant, perimeter fence and the  installation of four 800KVA and one 1000KVA generators,” he said.

He explained that the ancillary building will accommodate a medical centre, car park, restaurant, bank, among others, noting that all the service equipment for the main building, including electrical equipment such as lifts and escalators have been installed”.

Udie said over the years, there had been modifications on the scope of the project which have impacted on its cost.

On completion, he said, the complex would accommodate all the directorates, departments and units of NDDC, stating: “It will provide a conducive environment where government business will be carried out with ease and convenience.

Besides, the project’s revised scope is aimed at solving the age-long flooding of the William Jumbo neighbourhood by providing a network of perimeter drains which will discharge through double-cell culverts on the Eastern By-pass into the creeks.”

The Project Coordinator, Ebiwene Bozimo, also an architect, promised that the contractors would complete the project on schedule.

He said they were working according to set standards, stating that the contractors were determined to complete the project this month.

Bozimo said: “The only challenge we are facing is in getting items delayed by the COVID-19 pandemic. However, every task that is not involved with anything external is going on at the highest pace and we have promised the commission that every task that is not connected with overseas will be completed on schedule.”

Amid the attention on the project, NDDC is also working on permanent offices in all its mandate states. Currently, construction is at various levels in the states where the commission is using rented offices.

Apart from Abia, Imo and Rivers, the NDDC still operates from rented offices in Akwa Ibom, Bayelsa, Cross River, Delta, Edo and Ondo.

When on July 12, 2016, the NDDC commissioned a modern Rivers State Office complex on Olu Obasanjo Road in Port Harcourt, it was celebrated with pomp and circumstance.

The building is on four floors with ample space for offices and a basement floor for archiving and car park. It also has provisions for several facilities, including a large reception hall, conference/multi-purpose hall for 250 people, staff canteen, sick bay and offices for drivers on the ground floor.

Farmers have been affected by the Coronavirus pandemic and require assistance to prevent food shortage. EMMA ELEKWA reports that the palliatives promised by the government are yet to get to the farmers

SHE used to be a banker, but Mrs UcheIleka from Umezeagu Nnewi, Anambra State is now content being a farmer. She is into poultry, cocoyam, yam and vegetables farming and has been able to overcome the initial challenges she had with the dividends that enabled her to take care of her family and pay her children school fees.

She would, however, have been more satisfied with the business if the government had provided necessary incentives to enhance her yield and that of other women farmers engaged in the production of various foods in the state.

“I would have done much better if the government has been doing what they’re supposed to be doing, helping small farmers like us who believe in what we’re doing, keeping food on our tables, which is the slogan of SWOFON: No food, no nation, she said as she shows our reporter round her farm.

“No hatchery machine, no vaccination for the birds. Some of the ones we’re using are adulterated. No power supply to secure vaccines. That’s the major reason why we’re losing so many birds in the country, the issue of mortality!

“If these things were to be on the ground, I bet you, we won’t lack food in this country. Women farmers are wonderful. You could have seen okro here if not for lack of funds,” she said, adding that the impact of the COVID-19 lockdown has been very devastating.

“I have over 300 birds which I’m supposed to sell during Easter, but because of the COVID-19, I couldn’t exhaust them. You can see the remaining! The price of garri has gone up as much as N800, N1000. But before COVID-19, it was about N300. They even sold it N1,500 the earlier time it started,” she explained.

She also attributed the poor sales she and other women farmers are experiencing to lack of money in circulation, absence of social events such as funerals, weddings, and hotels shut down.

“Even those coming to patronise us are buying just one, some two.”

The roads in the area her farm is located are deplorable.

“The shortest route to access this place couldn’t have taken you up to five minutes, but look at the distance you’ve covered owing to bad road. If it rains now, sorry will be our second name,” Ileka further said, adding that she is among the numerous farmers yet to receive palliatives from both the state and federal governments.

“I’ve not gotten any single palliatives. We’re just hearing it on the television and radio. Nobody has given me even one cup of rice, both from the federal and state governments. Two weeks ago, they said the vehicle conveying those for Nnewi North spoilt on the way. Up till now, the vehicle has not been repaired.”

Ileka is one of the farmers in the remote areas of the Anambra State who are members of the Small Scale Women Farmers Organisation in Nigeria (SWOFON). The group, representing over 500,000 grassroots women farmers in the country is engaged in farming and contributes a lot to providing food in the country.

Despite various economic relief packages announced by the federal and state government and palliative measures to enable them to cope with the impact of COVID-19, virtually all the women farmer said they have not received the support they need apart from other challenges they have to cope with.

President Muhammadu Buhari had directed the implementation of a three-month repayment moratorium for all TraderMoni, MarketMoni and FarmerMoni loans to mitigate the impact of the pandemic on the small and medium scale enterprises.

He also directed that the social register of the poor “be expanded from 2.6 million households to 3.6 million households in the next two weeks” and placed a moratorium on all government-funded loans issued by the Bank of Industry, Bank of Agriculture and the Nigeria Export-Import Bank.

Buhari also announced an initiative aimed at minimizing the impact of the pandemic on the agriculture sector, directing the Minister of Agriculture and Rural Development, the National Security Adviser, the Vice Chairman, National Food Security Council and the Chairman, Presidential Fertilizer Initiative to work with the Presidential Task Force on COVID-19 to ensure the impact of this pandemic on 2020 farming season was minimized.

On its part, the CBN announced a credit relief package of N50 billion (about $136.6M) to businesses affected by the pandemic which the CBN Governor, Godwin Emefiele said would be for households, small and medium-sized enterprises, SMEs, agriculture food chain businesses, SMEs, airline operators, service providers, hotels and healthcare merchants.

In Anambra State, the government announced the securing of 3,000 hectares of arable land in the agricultural belt of the state for large scale farming during the planting season. The governor, Willie Obiano, who said the initiative is expected to take over 2,000 youths off the labour market, added that his administration came up with a short term plan that would ensure that food supply was not adversely affected in the state after Covid-19.

“We’ve ordered the purchase of seven tractors to be deployed in the cultivation of the land. We’re empowering women and youths by providing them with cages for poultry and feedstock for birds,” he said.

Although the pandemic has largely affected their early commencement of farm clearing, farmers in the state expressed confidence of still meeting up with the bountiful harvest, especially if governments would make good their promises of providing them with the necessary palliatives.

Another farmer, Mrs. Rosemary Onwuegbuka, the SWOFON Coordinator in Ayamelum Local Government Area who became a farmer over 20 years ago, cultivates cassava, yam and rice.

“I farm two hectares of rice and two hectares of cassava. Since the 20 years, I’m able to place food on the table, not just for me and my family, but those who visit us. You can’t come to my house without taking something.

“Again, I’m able to engage women with the help of my assistant, convincing them to see farming as a lucrative business. Women under me can boast of two, three farm lands, depending on their strength. I encourage them, instead of staying idle at home, they should go into farming,” she said.

She, however, regretted her inability to recruit more hands in the business owing to financial constraints.

“I’m yet to start employing people because of a lack of incentives. If the government will take us seriously by providing us with the necessary inputs, I would have done better. You can see the vast land we have that is still fallow. We need money to clear and cultivate it. Had it been they’re giving us tractor, seedlings, fertilisers, improved varieties of cassava stems at subsidised rates, that will enable us to have enough to employ people who we can pay.

“I’m supposed to have a Camp Manager by now so the workload will reduce. If you seek a bank loan, they will demand the Certificate of Occupancy of your shop. How can a farmer have a shop in the main market? It’s very difficult to access the loan.

“We find it difficult to employ people, instead we do what we call cluster farming. We work in someone’s farm today, tomorrow we go to another. If they assist us, with time, we’ll be exporting our rice, yam and cassava, and still have enough to sell locally.”

She, however, stressed the need for the assistance to be provided at the right time, noting that “this our area, we normally do dry season farming. So bringing the seedlings in October is useless to us.”

“We have not received any assistance. All they ask us to do is to write down our names after which they gave nothing. We’re finding it difficult to farm, because we farm in groups. We do rotate it.

“We went to our local government when we heard they were sharing fertilizer there, but they said our names were not there. They gave one bag each to four persons they claimed their names were captured in their list. They said our names are not in their lists even when we are the real farmers.”

She urged the government to avoid intermediaries while sharing palliatives or any form of incentives to farmers.

“Governments should stop going through middlemen, but come down to the grassroots. Let them come directly to us. We know the real farmers one by one. Anything they give us will definitely reach the farmers. We control over 1000 real farmers and we have their data,” she stated.

On the negative impact of the lockdown on their farming, Onwuka said the price of labour, has increased drastically.

“Our labourers who normally come from Ebonyi State no longer come because of the interstate movement restrictions. They can’t cross the border to come.

“Secondly, the cost of chemicals and maize seedlings skyrocketed because of the lockdown. Companies are not working. Besides, when we take our products to the market, we hardly sell due to a lack of patronage. We are forced to reduce the price so we can sell.”

Another woman farmer, Mrs. Amaka Anisigwe, who is the community women leader for Ihiala and Vice Principal, Abbo Girls Secondary School, said she has invested over N150,000 in her farm this year, for the clearing of the site, weeding, cultivating as well as putting the stems for cassava, melon, maize and pumpkin.

Anisigwe said she was among those who are yet to benefit from government palliatives.

“For now, I’ve not received anything, not even fertiliser, but I hope they will send it. But I wish it comes soon so that we can put them into use. That’s one way of encouraging us small scale women farmers. Even if they were diverted, let them re-divert them.

“Being a farmer is not an easy task, it has its merits and demerits, gains and losses. We really need seedlings, fertiliser to boost our farms. It’s only what we have we can push into the market.”

Unlike for others, the proud farmer however described the lockdown order as a blessing in disguise, saying the government should declare lockdown during every farming season so parents and their children could take advantage of the period to farm.

“With this lockdown, you can see there’s lots of hunger everywhere. It’s good everyone goes back to farming.

“One good thing about this Covid-19 lockdown is those who have not farmed for years now, are now in the farm with their family members. All the children have learnt how to cultivate and I love it so much.

“Most of the land that have been lying fallow for more than 15 years, go there now, they’ve all been cultivated. I advocate the government declare every farming season Covid-19 period so parents can go into farm work with their kids.

“My children are all engaged in every stage. Very soon, they will come for weeding. Bible says if you don’t work, don’t eat.

“Since over 12 years I started farming, I’ve achieved a lot from it. I know how much I normally make from cassava and maize during harvest season. Most women into roasting of corn normally come to buy from my farm.

“The proceeds have been helpful. I invest in my family, like paying school fees, rent, hospital bills and other necessary expenses. I can’t regret being a farmer in view of the great dividends.

“I have a bigger farm down the village, close to the river, three times bigger. We have rice, cassava. I’m a member of the Co-operative society where we process oil. I also have laborers I pay,” she said.

Anisigwe advised every household to be involved in agriculture. “Let them stop going to the market for everything when they can get them from their farms. For me, I don’t think of food scarcity. I even have enough to give to poor people. I’m praying the government to encourage us. We need money, I’m ageing. I’m an old woman, don’t mind my size. “I’m sure they must have learnt some lessons from the Covid-19,” she said.

Mrs. Amaka Ibemesi, a farmer from Onitsha North Local Government Area said has lots of land, cassava, plantains and vegetables and also assists her brother who’s into poultry farming.

Ibemesi also complained about the effects of the Covid-19 on her farming. “If not for this Covid-19, I could have gone far. If you see my cassava plants in Delta, you’ll marvel. It’s far more than this. It’s only cassava, maize and fertiliser that they have given me, from Idemili Local Government,” she said.

On the palliatives from the government, Ibemesi said she got maize, cassava stems from the local government.

“They also collected our account number and promised to assist later,” she said but appealed for more government assistance, to motive the farmers to produce more food.

“If the government will do the needful, I’ll surprise them. I can employ more hands. Like in Delta, we sell our produce. I have five children who are assisting me.”

Mrs. Chika Okafor, co-ordinator, SWOFON in Idemili South, told the reporter that she has over ten plots of land where she plants cassava, yam and potatoes.

On whether she had received any assistance from the government, Okafor said, “They have been making promises. Last two weeks, some seedlings from the state government were distributed, after collecting names.

“But it didn’t get to us, but rather ended with political farmers, not real farmers. In fact, I left the venue without getting anything. When they are bringing assistance, they should pass through the ministry of agriculture. They know the farmers. Instead of handing them over to politicians, they will end up hijacking them.”

On how they are coping, the widow said they used to purchase their inputs from the proceeds from the farm produce. Any of the market days, we go there and buy our seedlings. We also buy organic and lime fertilisers which we use.

“The Covid-19 pandemic really affected us. Ordinarily, we’re supposed to have finished the stage we are now, but because of the lockdown, no market is open for us to buy the seedlings. It really drew us back. She listed some of the challenges she encountered in the business to include epileptic power supply and utility vehicles.

“Some of the machines we use, including the processing machine doesn’t work always due to lack of steady power supply.

“We’re now planning to procure a generating set as back up. Let the government help us with a steady power supply. If not for the lockdown and power challenge, we could have been in money now, especially from garri. I so much cherish the garri processing machine because we also get starch from there.

“The starch we derive from the garri processing machine is a hot cake for pharmacists, they keep coming to make demands. If we have enough, we make much money from it.

“Presently, garri is expensive. So if you dry and grind cassava seedlings, many families will come for it because it is cheaper than garri. Even in my family, we no longer eat garri. It’s the dried cassava flour we eat. Most of the times we want to distribute our goods, we hire vehicles for that. If there’s any way the government can help us, we will appreciate it.”

Okafor further stressed the need for every household to engage in farming so as to mitigate the impending food scarcity.

“We will have food scarcity next year if everyone does not put his hands on agriculture. This Covid-19 has taught us so many lessons. For us, since the pandemic, we’ve not bought even a painter of garri in the market. We’ve always enjoyed the one from our farm. Every Nigerian is supposed to have a farm,” she stated.

• This report was made possible with support from the International Budget Partnership (IBP).

The Federal Government’s directive to domestic carriers to carry between 50 and 70 per cent of their aircraft passenger capacity on resumption has thrown up a huge debate. However, airlines have not agreed on the proposal that passengers vacate the middle seat in line with physical distancing protocols in post-COVID-19 guidelines, writes KELVIN OSA-OKUNBOR

AIRCRAFT in the fleet of indigenous carriers will soon resume operations. But conflict seems imminent. Reason: The contentious issue of the number of passengers they are permitted to airlift remains unresolved.

The carriers, scheduled to resume operations in five airports-Lagos, Abuja, Port Harcourt, Kano and Owerri for now, are in a fix as they struggle to comply with new post-COVID -19 guidelines which the Nigerian Civil Aviation Authority (NCAA) and the National Centre For Disease Control (NCDC) issued with regard to health and safety of passengers.

A major plank of the guidelines mandates returning carriers to activate measures that will ensure social distancing of passengers on board each aircraft in order to curtail the spread of the deadly Coronavirus disease.

Minister of Aviation Hadi Sirika said airlines that would resume operations are only permitted to carry between 50 and 70 per cent of the passenger capacity of their aircraft.

Sirika’s declaration in the last few weeks has not gone down well with operators and other stakeholders who argued that the already-clobbered air transport sector maybe on the verge of imminent collapse if load factor on aircraft is streamlined.

The minister had said: “Only 50 or 70 per cent of the passengers should be taken. These are some of the things that we have been looking at.

“This is because aviation, unlike other sectors, is a highly regulated sector.”

The minister said consultations had been on and would continue between the ministry and industry stakeholders on the best ways to operate profitably while at the same time ensuring the safety of travellers.

But operators are kicking against the proposed reduction in the number of passengers they could accommodate, saying such a suggestion is not profitable.

Experts say operators should focus on ensuring that all protocols at the airport and in the aircraft are strictly followed in line with short/domestic flights as recommended by the International Air Transport Association (IATA).

Amid anxiety over the issue, the Nigeria Civil Aviation Authority (NCAA) said discussions were ongoing on the modalities to be used in implementing physical distancing protocols in the aircraft. The apex regulatory body in the aviation sector said no decision has been taken on the proposal.

NCAA spokesman Sam Adurogboye explained that discussions were still ongoing on how best to implement the physical distancing guidelines in the sector.

According to him, if middle seats would be removed in order to enforce the physical distancing suggestion, it would be done in a safe and secure manner.

“We are still discussing the issue of physical distancing. There is no finality on that yet. We have to look at what is being done elsewhere. We cannot do ours in isolation,” he said.

Investigations by The Nation revealed that part of the issues that have arisen over modalities for compliance with the physical distancing protocol is the removal of middle seats in the aircraft.

President of Industry Think Thank Group – Aviation Safety Round Table Initiative (ASRTI), Dr Gbenga Olowo said achieving physical distancing on board the aircraft may not be realistic.

Read Also: Domestic flights resume June 21, says FG

He said no airline would break even by carrying 40 per cent of passengers in an aircraft.

His words: “On board an aircraft, physical distancing will be quite taxing, except the aircraft will be configured to all first-class seats for economic operations.”

However, domestic airlines have complained that the post-COVID-19 guidelines would increase the cost of operations, even as they opposed suggestions that middle seats in aircraft are left vacant during flights.

Chairman, Air Peace, Allen Onyema and the Chief Accounting Officer of Dana Air, Obi Mbanuzuo said it would be difficult for airlines that were already paying 37 charges before the pandemic to cope with the extra cost that will come with post-COVID-19 guidelines.

Onyema disagreed with plans to leave the middle seats of aircraft open, saying it will further decimate airlines’ revenue and build up additional costs.

He said: “Authorities have reeled off things and these things come with a huge cost. How will airlines manage that and pay about 37 charges?

“We have to look at the purchasing power of Nigerians. Before COVID-19, our cheapest ticket was offering for N23, 000, amounting to $63. Now that the 63 dollars amounts to N40, 000, the question is can Nigerian passengers afford it?”

Many experts also faulted the planned elimination of middle seats on aeroplanes, saying it would worsen cost implications for airlines.

AeroContractors Managing Director Captain Ado Sanusi said physical distancing is not realistic inside a single-aisle plane.

DANA Air, which had earlier announced that it will leave the middle seat on board its aircraft unoccupied said it has not jettisoned the plan.

Its spokesman, Mr Kingsley Ezenwa, said the implementation of the plan would be largely determined by the Ministry of Aviation.

He appealed to the government to fast-track the proposed intervention for airlines if the physical distancing must be enforced.

International Air Transport Association (IATA), the global aviation trade group also opposed the blocking of middle seats in aircraft.

The Geneva-based IATA said physical distancing measures on planes would “fundamentally shift the economics of aviation.”

Its Director-General and Chief Executive Officer, Alexandre de Juniac, said: “Airlines are fighting for their survival. Eliminating the middle seat will raise costs. If that can be offset with higher fares, the era of affordable travel will come to an end.

“On the other hand, if airlines can’t recoup the costs in higher fares, airlines will go bust. Neither is it a good option when the world will need strong connectivity to help kick-start the recovery.”

Experts say blocking middle seats is not the way to go.

They maintained that doing so will not meet basic public health guidelines for physical distancing, and would be a serious problem for airlines’ finances.

The global aviation body said the risk of catching COVID-19 on a plane was low as there was no need to leave the middle seat empty.

IATA, however, backed the wearing of masks by both passengers and crew but said it did not s

upport physical distancing measures that would leave the middle seat empty in a row of three.

Juniac said: “There would be ‘dramatic cost increases’ if such seats were left empty.

IATA said available evidence so far, though limited, suggests that the risk of virus transmission on a plane was already low.

“The reasons for this could include the fact that passengers face forwards, with limited face-to-face interaction, while seats provide a barrier to the person in front.

“Air flows downwards from the ceiling to the floor further reducing the potential for transmission, while airflow rates are not high and not conducive to droplet spread as in regular indoor environments.”

The global body also said High-Efficiency Particulate Air (HEPA) filters on modern aircraft will clean the cabin air to hospital operating theatre quality.

Juniac went on: “The cabin environment naturally makes transmission of viruses difficult.

“Our aim is to make the cabin environment even safer with effective measures so that passengers and crew can return to travel with confidence.

“Screening, face coverings and masks are among the many layers of measures that we have recommended. Leaving the middle seat empty, however, is not the best option.

“Besides, everyone adopting masks on board, the proposed temporary measures to reduce the risk of infection include temperature screening of passengers, airport workers and passengers and limiting movement in the cabin mid-flight.

More frequent and deeper cleaning measures are being considered, along with boarding and disembarking processes that reduce contact.”

Besides IATA’s position, the global industry is planning to come up with a solution to flying in a future where hygiene is even more paramount. But not all airlines are entertaining the notion that it’s feasible to get rid of middle seats. Some carriers, including United, Delta, WestJet, EasyJet and other airlines have stopped carrying passengers in the middle seats.

Other carriers have announced plans to do away with the middle seats in their economy class cabins during the COVID-19 pandemic.

Some airlines have started limiting seat selection for adjacent seats in all of their cabins, including middle seats where the available and alternating window and aisle seats when seats are in pairs.

Across the globe, a section of passengers have expressed mixed feelings on the proposal to remove the “unloved middle seat.” Many passengers said they will not vote for the removal of the middle seat.

Managing Director of Tokyo-based LIFT Aero Design,  a firm that helps airlines’ design cabins and customer experience, Daniel Baron, said: “But would blocking middle seats actually help us maintain proper physical distancing? If so, how long could airlines keep doing it? Is it a realistic option beyond the very short term? “Right now, we need it, because not doing so would contradict instructions from authorities and common sense. The urgent need to slow infection rates takes precedence overall, even if the solution is not perfect.

“Long-term, however, it is not economically sustainable. After the dust settles, we will all go back to expecting affordable global mobility again.”